The effects on economic growth of the orientation of the trade and payments regimes of less Developed countries

Abstract

Economists have debated whether an inward oriented economy (one which is protected from competition of world prices) or an outward oriented economy (which has equivalent incentives for imports or domestic production) would better promote economic development. Previous studies in this area by Bela Belassa and Anne Krueger have been inconclusive. This study examines the hypothesis that an outward oriented trade and payments regime would enhance economic growth in less developed countries. The tests of the data presented in this paper indicate that an outward oriented trade and payments regime is positively correlated with higher economic growth. A description of the theory, the methods used, and the results is included.