Abstract
During the 1980s and 1990s, most developing countries have moved away from import substitution to free trade. The move towards export- oriented growth strategy was prompted by the belief that trade liberalisation resulting from improved resource allocation in line with social marginal costs and benefits, access to better technologies, economies of scale and scope, greater domestic competition and shake-up of hitherto protected industries within a Schumpeterian environment would induce rapid economic growth (Dornbusch, 1992). However, careful observers warn that developing countries should not over-sell trade reforms as a cure for all their economic problems (Rodrik, 1992). While an abysmal trade regime can, perhaps, drive a country into economic ruin, a good trade policy per se cannot make a poor country rich (Rodrik, 1992). Nevertheless, countries like India have joined the bandwagon.
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