International Essay

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I Research Paper No. 992 \‘ THEORETICAL ISSUES CONCERNING THE HISTORY OF INTERNATIONAL TRADE AND ECONOMIC DEVELOPMENT Gerald M. Meier Delivered at the Free University, Berlin, May 6, 1988.Analyses of the contribution of international trade to economic development display a curious tension between pessimistic and optimistic conclusions. If a nation follows its comparative advantage and realizes the gains from trade will it also be on its optimal development path? Or, in contrast, should the nation abandon comparative advantage and relinquish the gains from trade the better to secure the gains from growth? Theoretical perspectives on this issue can come from classical trade theory, neo-classical trade theory, and recent theories of international trade. Historical perspectives can be derived from even before the industrial revolution; subsequent papers will illuminate the historical experience of a number of countries. This paper focuses on the theoretical issues, with concentration on the pessimistic-optimistic strand in the history of thought. A colleague’s Festschrift is a stimulating occasion for one’s own retrospection, and perhaps a bit of autobiography can sharpen the central issue that I want to discuss. When I first studied international trade in the early 1950s at Harvard with Professor Gottfried Haberler, the theory of international trade theory took resources, technology, and tastes as given. The following year at the University of Oxford, Hia Myint introduced me to problems of economic development, and I studied the macrodynamic models of Roy Harrod and John Hicks. I then read the pioneering works of Ragnar Nurkse and Arthur Lewis. Both Nurkse and Lewis were pessimistic about the power of international trade to act as an “engine of growth” (in D. H. Robertson’s phrase)l for the late developing nations of Asia, Africa and Latin

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