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Trade and Development in a Fracturing World
In a fracturing world, how can low- and middle-income countries (LMICs) continue to leverage trade for economic development? Drawing on recent research at this intersection, this review argues that countries should look inward toward domestic reforms in key factor markets. I review evidence on how trade in LMICs is shaped by frictions in labor, capital, material, land, and information markets, and highlight areas where the evidence base remains thin. I concluded with a discussion of vertical policies relevant for LMICs―particularly the role of services―and suggest areas where further research is needed to assess whether development can be service-led.
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