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one which will not lead to any long term gains for the economy. An example if that of the time when the GATT system was established which mostly focussed on the tariffs and barriers to trade. This enabled trade liberalization for the developing countries and allowed the more innovative ones to make full use of the opportunities available.

An example is that of the East Asian economies which flourished under these new circumstances for open trade and globalisation. They undertook various reforms which involved combining the benefits of globalisation with policies such as export-import links, subsidies for export, restrictions on foreign direct investment and many intellectual property rights. According to Rodik many improvisations to these reforms can be used by the poor, least developed countries. These economies usually remain unaffected by small changes in the developed world and can therefore be giving free access to markets for their products. It would be institutionally beneficial for them if they are given some flexibility in shaping policies to suit their domestic requirement and also allowing them duty free and quota free access to markets.

The Doha round did try to negotiate on these principles and sought to achieve quota free and duty free access to markets for the exports of developing countries. However, due to conflicting interests it failed on many grounds and could not really do any measureable good to the developing world. This should serve as an eye opener to the developed world and should move them to take certain initiatives and measures at their own levels. Building on Rodrik’s arguments, these countries could take full advantage of whatever open trade opportunities are available to them and should mould domestic policies and frameworks to integrate their institutional values with the global market. They should spur domestic investment through the development of public infrastructure, personnel training, and peace and political stability. Reforms such as these set the stage for economic growth which in turn leads to greater development and hence more growth.

In most cases, it is highly beneficial for developing countries to work on their own policies and to keep themselves open to international markets in order to reap the full range of benefits of globalisation. This presents opportunities for trade liberalisation and investment which will eventually lead to economic growth and hopefully, sustainable development. However, each country must back these with a strong framework which effectively meets global standards and requirements. Some countries like those in the Middle East and Latin America flourished by shutting off them to the world through import substitution and by focussing on domestic investment. However this phases out very soon which further emphasises the importance of becoming a player in the global economy.

Benefits

Opening up the economy to the world can have many long term benefits for growth. This kind of ‘out-ward oriented’ industrialization in East Asian countries, as claimed by Rodik, was driven by export to international markets and which hence lead to diversification to meet outside demand and technological advancement to keep in sync with global advancements. Import liberalization in these economies took a backseat in the initial years and more emphasis was placed on adequate provision of resources to