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S2 Ep14: Does being open to trade help development?

VoxDev Development Economics

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Does Trade Improve Allicative Efficiency?

The lititas is looking at how trade might improve allicative efficiency. The simple idea in these last two terms is essentially, does trade make the country more or less distorted? If we think what trade does is that the big firms are able to grow even bigger, they can nove access foreign markets, and they're able to successfully expand meanwhile small farms face a lot of competition from abroad. And so if you do believe that these big farms, in the end, are more distorted than the small farms, we want those big farms to growing even bigger. That's going to bring an extra benefit from trade in improving allicative efficiency."

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