Trade Liberalization in the CSFR, Hungary, and Poland: Rush and Reconsideration

Abstract

In the rich literature on attempts at liberalizing trade there is ample evidence that for less developed economies trade liberalization usually takes a long period of time. The opening up of economies has successive phases of progress, reversals, and even serious regressions. Taking an overly restrictive trade regime as a starting point, the whole process of liberalization may last for two to three decades on average.¹ The chance of success of a zealous move for trade liberalization depends on many factors: the position of the economy in the international distribution of labor; the tendency of balance of payments, external indebtedness, and foreign aid; the accompanying package of macroeconomic policies; the stage the economy achieved in establishing modern institutions of a market economy; the efficiency of its political institutions; the power of pressure groups, and so on.