Strategic Trade Policy: An Option for Developing Countries?

Do developing countries have anything to learn from the «Strategic Trade Policy» debate? What lessons can they derive out of controversial models leading to constrasting perspectives about the impact of trade upon growth? This book addresses such questions by offering a critical review of the main developments of trade theory, concentrating on the implications of imperfect competition and increasing returns to scale in the analysis of trade. It also discusses the trade-growth relationship in the light of endogenous growth theories and explores the existence of a case for developing countries engaging in trade promotion of knowledge generating sectors. An account of the experiences with different trade regimes of various East Asian and Latin American countries and CGE-simulations of the effects of targeted trade promotion policies in Venezuela complement the analysis.