Trade liberalization, growth and poverty reduction - the case of Bangladesh

Abstract

The paper seeks to compile evidence for the hypothesis that greater trade openness, and associated deregulation is good for growth, and poverty reduction in Bangladesh. At the theoretical level, it can be argued that since Bangladesh is relatively heavily endowed with labor, within the framework of the Hecksher-Ohlin model (1933 and 1949), expansion of international trade opportunities will likely support the growth of labor-intensive export industries, promoting employment, and incomes as per the Stolper-Samuelson Theorem (1941). Arguments also suggest improved productive and allocative efficiency; factor accumulation and investment; knowledge spillovers; improved income distribution; and, government policy improvements. The paper argues, using qualitative and quantitative analysis and a case study approach, that Bangladesh's increasing global integration, based on trade liberalization, and other economic deregulation, especially as of the 90s, contributed significantly to the acceleration of per capita income growth, and poverty reduction. It looks briefly at issues of trade openness, and economic development from the theoretical perspective, reviews the empirical basis for the effects of trade openness on economic development, and, focuses broadly on economic deregulation, and trade liberalization. Policy regimes implications are analyzed to provide a series of observations.

Cite this work

No public copy is stored for this record, so only the metadata is cited.

Stored only when both papers are in the corpus — 45 citations exist upstream.