Trade and Development

Abstract

What does international trade offer the LDC — a threat or an opportunity? As usual in economics, the answer is a mixture of both depending on a series of secondary factors. The relationship between an LDC and the trading world is dependent on its factor endowment, its political attitudes to trading partners and MNEs, and its recent economic history. For example, the discovery of oil, the joining of a trade bloc, or the ending of an imperial relationship could all make differences to the level of welfare in the country.