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World Bank Trade Policies Yield Mixed Results


The World Bank has invested $38 billion since 1987 in programs aimed at promoting trade in developing countries. For the first time, the Bank's Independent Evaluation Group has published a study on how successful those programs have been.

Researchers found that World Bank efforts to promote trade in 117 developing countries had made some progress, but not as much as officials had hoped. "One, our evaluation finds that the developing world indeed is far more open today than at any time we can remember. But, two, the evaluation confirms that liberalizing trade by itself is not enough to generate growth and to fight poverty," he said.

Vinod Thomas heads the World Bank Independent Evaluation Group. He says the Bank's efforts have contributed to a worldwide reduction in the import tariffs that countries charge to protect their domestic industries.

The World Bank says such falling trade barriers boost global trade, which benefits all countries.

But Thomas also notes that some countries have followed the Bank's advice and reduced import tariffs, but their economies have not performed nearly as well as others. "Just consider one example. In Africa, the top three export products make up 54 percent of all exports. While in East Asia, they are only 14 percent," he said.

The few products available for export in Africa indicate that efforts to lower trade barriers did not, on their own, significantly boost economies.

But in East Asia, countries such as China lowered trade barriers and promoted what researchers call "complementary measures" to strengthen their economies, such as training their workforce, increasing competition and building infrastructure.

Report author Yvonne Tsikata says the World Bank needs to work more on promoting such complementary measures in countries in Africa and Latin America. "One of the points of our report is that the trade agenda is much much different than it was two decades ago. It's not just about import tariffs. It has to do with all these other factors that have to do with the domestic business climate," he said.

Tsikata says the Bank should also consider changing the way it is organized internally, bringing together its macro-economists, private business developers, finance and insurance experts to generate new ideas.

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