Trade Liberalization in Sub-Saharan Africa: Stagnation or Growth'

Abstract

This paper argues that the greater the liberalization of imports in a Sub-Saharan African country, the more significant is the decline in its rate of growth due to the recession in high income economies during the late eighties and early nineties. This could be explained by the fact that when industrial countries are suffering from recession, the terms of trade may move in favor of developing countries due to a fall in the dollar price of importables. The volume of competitive imports may not rise in this circumstance in a country that has a well designed 'interventionist' trade regime.