- Handbook on Trade and Development ed. by Oliver Morrissey, Ricardo A. Lopez, and Kishor Sharma
The Handbook, comprised of twenty-three chapters, outlines the linkages between trade and economic performance for developing countries. A central theme advanced in this volume is that not all developing economies are able to realize the benefits of trade, particularly countries in sub-Saharan Africa (SSA). To expand on this theme, the volume features three separate sections comprising five chapters each on SSA (Part II); Latin America (Part III); and East Asia (Part IV). This framework captures the nuances in the complex relationships between trade and development within the context of region and country case studies.
Beyond the introductory chapter, which provides a roadmap of the contents of the volume by the editors, the book is divided into four parts. The thematic analysis, based on major trade-related issues relevant to the developing world, is expounded in Part I. It consists of seven chapters and sets the background for the remaining three sections (Parts II, III and IV). It details the fledgling theoretical and empirical literature on trade costs and facilitation (Chapters 3 and 4) and offers a vibrant discourse on conceptual approaches, methodological differences and empirical findings on the above-mentioned topics. More importantly, Part I also defines a new and related research agenda. For example, Ferro, Wilson and McConaghy recommend further analytical research on trade facilitation and aid-for-trade effects at the firm-level in Chapter 4 (p. 83), while Cirera and Cooke (Chapter 5) advocate policy research on the effectiveness of reciprocal trade preferences in the South-South context (p. 105). Worth mentioning here is that avenues of further inquiry are not confined to Part I, but are also evident in the chapters of the subsequent sections examining the different regions. The innovative and forward-looking ideas set forth in the various chapters will encourage researchers to continue to seek answers in a way more profound than even before, and refine the current state of the academic research in this area.
The chapters in Parts II, III and IV debate on distinctive topics across regions and countries to offer an updated and balanced view of the trade-development nexus. These include agglomeration, informal cross-border trade, regional trade and commodity prices for the SSA. The chapters on Latin America cover export diversification, exchange rate volatility, imported technology and foreign direct investment (FDI). The chapters on East Asia include global production sharing (and vertical specialization), external shocks and the links between trade and FDI, environment and labour. The experiences and emerging findings from the region- and country-based chapters provide some new insights that are not borne out by stylized facts on trade-development linkages. These include: the disincentive for firms to agglomerate in SSA (Chapter 9); the opposite reaction of export behaviour to commodity price increases in SSA (Chapter 12); the insensitivity of component trade to changes in relative prices (Chapter 19); and the lack of export growth in Indonesia despite currency depreciation (Chapter 21). The chapters in Parts II to IV therefore allow the reader to rethink outcomes to be explained with new or a combination of approaches, for example the paradox of the fragile foundation of informal cross-border trade in SSA that instead benefits income and employment (Chapter 10).
Chapters 14, 20 and 23, more specifically, address the roles and experiences of main regional participants in international commerce: Brazil in Latin America and China in East Asia. [End Page 226] These chapters are significant in that they remind the reader that alongside the gains — such as productivity, FDI and technological performance (p. 20) — from international trade, are the challenges arising from higher levels of integration. While the former are largely known and widely accepted from the literature, the latter can only be understood within a country context. In the case of Brazil, Garzia and Lopez (Chapter 14) point out that addressing rising transportation costs is crucial for firms to move forward and build their competitiveness. Likewise, Zhang and Zhang (Chapter 20...