Research on Wade Policy and Growth:

Extensive  research was conducted from the mid-sixties on the impact of  trade policy  on economic performance. This research as Bruton mentions, tended to concentrate  on the problems either  not solved by  the  ISI approach  or created by that approach and tended to ignore the achievements. The main conclusions  of  this research  that were stressed were that ISI  policies resulted in substantial inefficiencies  that had a detrimental effect on economic performance. Countries, which followed  an  export  oriented  trade  policy performed better than countries, which  followed ISI policies. Also countries did better in periods where they adopted more liberal policies than when they adopted more restrictive policies.

Three types of analysis of the  link  between  trade  policy  and  growth  in productivity  and  income were undertaken. Initially, cross-country regressions were run  on  growth of GDP against some measure of export performance. These regressions, however, did not provide the reasons why  better  export performance resulted in higher growth of GDP. Also it was realised that export performance depended on many factors. Later in  the 90s,  analysts tried  to correlate trade policy  to growth of GDP. The  shortcomings  of the cross country analysis was sought  to be rectified by more  in depth country  studies  that sought to  identi9 the channels through which trade  policy affected  economic