How has trade liberalisation affected growth in transition economies? Did the Accession process help?

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  2. Dr David Barlow
Author(s)Barlow D
Publication type Conference Proceedings (inc. Abstract)
Conference NameEU Enlargement: Lessons Learned and Future Prospects
Conference LocationIstanbul Turkey
Year of Conference2008
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Economic reform in former communist countries has occurred at the same time as these countries have tried to integrate into the world economy. The extent to which such integration, particularly through trade, can influence domestic production depends upon the extent to which domestic producers are affected by foreign competition. The relationship between growth, trade liberalization, and internal reforms is investigated. A strong relationship is found between GDP growth and trade liberalization once non-linearities are incorporated, and once we control for inflation, the small scale private sector, war and the price liberalization shock. The quadratic relationship between growth and external reform indicates an optimal degree of external reform that is less than full liberalization, but greater for the EU candidates than for the other countries. No direct role is found for internal reforms other than small scale privatization.
PublisherEuropean Union