Regional Integration Agreements: A Force for Convergence or Divergence?
December 1999 - Developing countries may be better served by north-south than by south-south free trade agreements. Free trade agreements between low-income countries tend to lead to divergence in member country incomes, while agreements between high-income countries tend to lead to convergence. Ven...
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| Format: | Elektronisch E-Book |
| Sprache: | English |
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Washington, D.C
The World Bank
1999
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| Online-Zugang: | BSB01 EUV01 HTW01 FHI01 IOS01 URL des Erstveröffentlichers |
| Zusammenfassung: | December 1999 - Developing countries may be better served by north-south than by south-south free trade agreements. Free trade agreements between low-income countries tend to lead to divergence in member country incomes, while agreements between high-income countries tend to lead to convergence. Venables examines how benefits - and costs - of a free trade area are divided among member countries. Outcomes depend on the member countries' comparative advantage, relative to one another and to the rest of the world. Venables finds that free trade agreements between low-income countries tend to lead to divergence in member country incomes, while agreements between high-income countries tend to lead to convergence. Changes induced by comparative advantage may be amplified by the effects of agglomeration. The results suggest that developing countries may be better served by north-south than by south-south free trade agreements, because north-south agreements increase their prospects for convergence with high-income members of the free trade area. In north-south free trade agreements, additional forces are likely to operate. The agreement may be used, for example, as a commitment mechanism to lock in economic reforms (as happened in Mexico with the North American Free Trade Agreement and in Eastern European countries with the European Union). A free trade agreement may also - through its effect on trade and through foreign direct investment - promote technology transfer to lower-income members. This paper - a product of Trade, Development Research Group - is part of a larger effort in the group to study the effects of regional integration. The author may be contacted at avenables@worldbank.org |
| Beschreibung: | 1 Online-Ressource (36 Seiten)) |
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| 520 | 3 | |a December 1999 - Developing countries may be better served by north-south than by south-south free trade agreements. Free trade agreements between low-income countries tend to lead to divergence in member country incomes, while agreements between high-income countries tend to lead to convergence. Venables examines how benefits - and costs - of a free trade area are divided among member countries. Outcomes depend on the member countries' comparative advantage, relative to one another and to the rest of the world. Venables finds that free trade agreements between low-income countries tend to lead to divergence in member country incomes, while agreements between high-income countries tend to lead to convergence. Changes induced by comparative advantage may be amplified by the effects of agglomeration. The results suggest that developing countries may be better served by north-south than by south-south free trade agreements, because north-south agreements increase their prospects for convergence with high-income members of the free trade area. In north-south free trade agreements, additional forces are likely to operate. The agreement may be used, for example, as a commitment mechanism to lock in economic reforms (as happened in Mexico with the North American Free Trade Agreement and in Eastern European countries with the European Union). A free trade agreement may also - through its effect on trade and through foreign direct investment - promote technology transfer to lower-income members. This paper - a product of Trade, Development Research Group - is part of a larger effort in the group to study the effects of regional integration. The author may be contacted at avenables@worldbank.org | |
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| spelling | Venables, Anthony Verfasser aut Regional Integration Agreements A Force for Convergence or Divergence? Venables, Anthony Washington, D.C The World Bank 1999 1 Online-Ressource (36 Seiten)) txt rdacontent c rdamedia cr rdacarrier December 1999 - Developing countries may be better served by north-south than by south-south free trade agreements. Free trade agreements between low-income countries tend to lead to divergence in member country incomes, while agreements between high-income countries tend to lead to convergence. Venables examines how benefits - and costs - of a free trade area are divided among member countries. Outcomes depend on the member countries' comparative advantage, relative to one another and to the rest of the world. Venables finds that free trade agreements between low-income countries tend to lead to divergence in member country incomes, while agreements between high-income countries tend to lead to convergence. Changes induced by comparative advantage may be amplified by the effects of agglomeration. The results suggest that developing countries may be better served by north-south than by south-south free trade agreements, because north-south agreements increase their prospects for convergence with high-income members of the free trade area. In north-south free trade agreements, additional forces are likely to operate. The agreement may be used, for example, as a commitment mechanism to lock in economic reforms (as happened in Mexico with the North American Free Trade Agreement and in Eastern European countries with the European Union). A free trade agreement may also - through its effect on trade and through foreign direct investment - promote technology transfer to lower-income members. This paper - a product of Trade, Development Research Group - is part of a larger effort in the group to study the effects of regional integration. The author may be contacted at avenables@worldbank.org Online-Ausg Agriculture Comparative Advantage Consumers Country Strategy and Performance Development Economics Economic Integration Economic Performance Economic Theory and Research Emerging Markets Finance and Financial Sector Development Financial Literacy Free Trade Human Capital Income Income Levels Inequality International Economics & Trade Law and Development Macroeconomics and Economic Growth Outcomes Per Capita Income Per Capita Incomes Poverty Reduction Private Sector Development Production Public Sector Development Real Income Social Protections and Labor Theory Trade Diversion Trade Law Trade Policy Trade and Regional Integration Value Value Added Welfare Venables, Anthony Sonstige oth Venables, Anthony Regional Integration Agreements http://elibrary.worldbank.org/content/workingpaper/10.1596/1813-9450-2260 Verlag URL des Erstveröffentlichers Volltext |
| spellingShingle | Venables, Anthony Regional Integration Agreements A Force for Convergence or Divergence? Agriculture Comparative Advantage Consumers Country Strategy and Performance Development Economics Economic Integration Economic Performance Economic Theory and Research Emerging Markets Finance and Financial Sector Development Financial Literacy Free Trade Human Capital Income Income Levels Inequality International Economics & Trade Law and Development Macroeconomics and Economic Growth Outcomes Per Capita Income Per Capita Incomes Poverty Reduction Private Sector Development Production Public Sector Development Real Income Social Protections and Labor Theory Trade Diversion Trade Law Trade Policy Trade and Regional Integration Value Value Added Welfare |
| title | Regional Integration Agreements A Force for Convergence or Divergence? |
| title_auth | Regional Integration Agreements A Force for Convergence or Divergence? |
| title_exact_search | Regional Integration Agreements A Force for Convergence or Divergence? |
| title_exact_search_txtP | Regional Integration Agreements A Force for Convergence or Divergence? |
| title_full | Regional Integration Agreements A Force for Convergence or Divergence? Venables, Anthony |
| title_fullStr | Regional Integration Agreements A Force for Convergence or Divergence? Venables, Anthony |
| title_full_unstemmed | Regional Integration Agreements A Force for Convergence or Divergence? Venables, Anthony |
| title_short | Regional Integration Agreements |
| title_sort | regional integration agreements a force for convergence or divergence |
| title_sub | A Force for Convergence or Divergence? |
| topic | Agriculture Comparative Advantage Consumers Country Strategy and Performance Development Economics Economic Integration Economic Performance Economic Theory and Research Emerging Markets Finance and Financial Sector Development Financial Literacy Free Trade Human Capital Income Income Levels Inequality International Economics & Trade Law and Development Macroeconomics and Economic Growth Outcomes Per Capita Income Per Capita Incomes Poverty Reduction Private Sector Development Production Public Sector Development Real Income Social Protections and Labor Theory Trade Diversion Trade Law Trade Policy Trade and Regional Integration Value Value Added Welfare |
| topic_facet | Agriculture Comparative Advantage Consumers Country Strategy and Performance Development Economics Economic Integration Economic Performance Economic Theory and Research Emerging Markets Finance and Financial Sector Development Financial Literacy Free Trade Human Capital Income Income Levels Inequality International Economics & Trade Law and Development Macroeconomics and Economic Growth Outcomes Per Capita Income Per Capita Incomes Poverty Reduction Private Sector Development Production Public Sector Development Real Income Social Protections and Labor Theory Trade Diversion Trade Law Trade Policy Trade and Regional Integration Value Value Added Welfare |
| url | http://elibrary.worldbank.org/content/workingpaper/10.1596/1813-9450-2260 |
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