Trade and Development: Lessons from Vietnam's Past Trade Agreements

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History, not predictions of CGE models or cross-country growth studies, shows a strong relationship between trade and development. Vietnam's experience with bilateral trade agreements, comparing actual outcomes with predictions from existing models, demonstrates this and the limitations of research methodologies. Forecasts for Vietnam greatly underestimated the impact of past agreements because tariff reform was not the main factor driving adjustments. Addressing market imperfections through institutional reform was central to bringing output and trade expansion. Key questions for future research are whether policy reform will result in new institutional changes, and how resulting incentives determine the evolution of investment by sector.
Original languageEnglish
JournalWorld Development
Issue number2
Pages (from-to)341-353
Number of pages13
Publication statusPublished - 2009

ID: 10001539