The Impact of Multilateral Trade Liberalisation on Economic Development: Some Empirical Evidence

This article examines the impact of multilateral trade policy liberalisation on countries' levels of economic development, proxied by their real per capita income. The study is particularly relevant in the current context of growing rhetoric against international trade, which could fuel domestic protectionism and would likely undermine multilateral trade liberalisation. The analysis has been conducted on a panel data set of 155 countries, over non‐overlapping four‐yearly sub‐periods during 1995–2014. The empirical results suggest strong support for the view that multilateral trade liberalisation promotes economic development. Hence, the rise in unilateral protectionist trade measures around the world would likely endanger the prospects of further multilateral trade liberalisation and ultimately undermine countries' prospects of economic development.