Exports and Economic Development of Less Developed Countries

The question of how far exports, particularly primary exports, are capable of providing the underdeveloped countries with a satisfactory basis of economic development has been extensively discussed during the last two decades and may still be regarded as something of an open question. Prima facie the broad facts relating to the export and development experiences of these countries during the period seem to support those who advocated policies of freer trade and export expansion rather than those who advocated policies of protection and import-substitution. Thus, despite the ‘export pessimism’ of the latter, which persisted well into the 1960s, the period 1950–70 has turned out to be a period of very rapid expansion in world trade and those underdeveloped countries which responded to the buoyant world market conditions have been able to expand their exports rapidly, typically above 5 per cent per annum. This export expansion included not only the primary exports produced by the large mining and plantation enterprises, but also those produced by the small peasant farmers. In addition, a smaller group of countries have expanded their exports of manufactured and semi-processed products. Furthermore, the countries which expanded their exports have also tended to enjoy rapid economic development and significant correlations have been found between the growth of export and the growth of national income among the underdeveloped countries by cross-section studies; by time-series studies; or by a combination of both methods (Emery, 1967, Maizels, 1968, Kravis, 1970a and 1970b and Chenery, 1971).