This paper uses panel data and times series/cross section analysis to estimate the effect of trade liberalisation on export growth, import growth, the balance of trade and the balance of payments for a sample of 22 developing countries that have adopted trade liberalisation policies since the mid-1970s. We find that liberalisation stimulated export growth but raised import growth by more, leading to a worsening of the balance of trade and payments. To the extent that this has constrained the growth of output and living standards, the findings have important implications for the sequencing and degree of liberalisation.One of the major purposes of trade liberalisation is to promote economic growth by capturing the static and dynamic gains from trade through a more efficient allocation of resources; greater competition; an increase in the flow of knowledge and investment and, ultimately, a faster rate of capital accumulation and technical progress. Barriers to trade and anti-export bias will reduce export growth below potential. Import controls are likely to reduce efficiency, although, at the same time, they protect the balance of payments. The presumption is that trade liberalisation will raise the growth of exports and imports but the implications for the trade balance and the balance of payments are uncertain because this depends on the relative impact of liberalisation on export and import growth and on what happens to the prices of traded goods. Trade liberalisation may promote growth from the supply side but, if the balance of payments worsens, growth may be adversely affected from the demand side because the payments deficits resulting from liberalisation are unsustainable and not easily rectified by relative price (real exchange rate) changes (Khan and Zahler, 1985).The purpose of this paper is to examine this issue in a systematic way taking 22 developing countries from different continents that have undergone extensive trade liberalisation since the mid-1970s. We are interested in answering four major questions. First, what has been the effect of trade liberalisation on export and import growth in the aggregate for all countries in the sample and, are there differences between the major regions of Africa, Latin America, East Asia, and South Asia? Second, has the impact of liberalisation been greater on export growth or import growth? Third, how has liberalisation affected the price and income elasticities of demand for exports and imports? Last, what has been the effect of liberalisation on the trade balance and the current account of the balance of payments of countries: has there been improvement or deterioration? Theoretically, the effect of liberalisation on the trade balance or balance of payments is ambiguous whatever framework of balance of payments adjustment theory is used, so the issue becomes an empirical one (see later). The results have policy implications relating to the 'sequencing' of export and import liberalisation. If foreign

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may AbstractThis paper examines the impact of trade liberalisation on export growth for a sample of developing economies using the export demand function approach. The research applies dynamic panel data models based on fixedeffects and generalised methods of moments (GMM) estimators. In addition, heterogeneous panels for the complete sample, as well as for different regions, are estimated using a time-series/cross-section technique. The main findings are that exports react negatively to an increase in relative prices, and positively to world income growth. Furthermore, export duties have a detrimental effect on export growth, though the impact is relatively small, while trade liberalisation emerges as a significant positive determinant of export performance. JEL Classification: C21, E21, F14, F13, F41

Global investment in the Sustainable Development Goals (SDGs) is falling short of the target to close the $2.5 trillion annual financing gap for developing countries. The COVID-19 shock has exacerbated existing constraints for the SDGs and may undo the progress made in he last 6 years in SDG investment. This poses a risk to delivering on the 2030 Agenda for Sustainable Development. This paper assesses the global trends in both investing in and financing the SDGs, including the myriad of financing instruments launched to respond to the COVID-19 health crisis and its economic and social impacts. It analyses the main challenges for mobilizing funds, channeling investment into SDG sectors, and maximizing positive impact, as well as regulatory dilemmas in promoting SDG investment. The article then elaborates on a set of policy measures for accelerating investment in the SDGs, including four principles for guiding private sector investment, mainstreaming the SDGs into national and international investment policies and promotion strategies, harnessing financial instruments for sustainable development, building special SDGs model zones, and promoting better ESG standards, compliance, and reporting.

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