Introduction and Overview

In this volume, we reprint my articles on the following subjects: (i) trade policy guidelines; (ii) trade policy in the transition from communist or planned economies to market economies; (iii) unilateral, dynamic and environmental issues in trade using CGE models; (iv) trade policy of the United States in autos and steel; and (v) papers in mathematical economics. The papers in the first section of this volume were designed to help establish the knowledge base for World Bank country economists and others trying to establish trade policies in developing and transition countries that contribute to development and poverty reduction. These are papers on the role of trade policy in poverty reduction, tariff policy, exchange rate overvaluation problems, adjustment costs of trade liberalization, trade and technology diffusion, and rules of thumb on regional economic policy. My co-authors and I have emphasized, however, that there is no “one size fits all” trade policy. Trade policy must be adapted to the conditions of individual countries. The key issue in trade policy is only occasionally simply tariffs, as might be emphasized in textbooks. Non-tariff barriers, the costs of trading across borders, exchange rate overvaluation, regional trade issues, costs of services in trade, adjustment costs and rent-seeking are all issues that I have addressed in my experience of working in more than 25 countries as a trade policy advisor. Determining the primary trade policy problem is one of the first challenges a trade policy advisor must address in diagnosing the country’s trade regime. Probably nowhere was that adaptation to local conditions more important than in the design of trade policies for countries making the transition from communist or planned economies to market economies. The efforts of the former Soviet bloc countries to make this transition to market economies was without historical precedent, and the opportunity to work with these governments on the transition was both extremely challenging and incredibly energizing. The papers in the third section of this volume are based on very innovative computable general equilibrium models that are among my most widely cited papers. In the fourth section of this volume, I reproduce some of my papers on the automobile and steel sectors; the section includes papers based on partial equilibrium, general equilibrium and econometric models. The final section of the volume contains papers in mathematical economics…