Exports,policy choices,and economic growth in developing countries after the 1973 oil shock

In a study of 43 developing countries in the 1973–78 period of external shocks, the author has shown that intercountry differences in the rate of economic growth are affected by differences in investment rates and by the rate of growth of the labor force, by the initial trade policy stance and by the adjustment policies applied, as well as by the level of economic development and the product composition of exports. The results show that the policies adopted have importantly influenced the rate of economic growth in developing countries. In particular, an outward-oriented policy stance at the beginning of the period and reliance on export promotion in response to these shocks, appear to have favorably affected growth performance. The results further indicate the possibilities for low-income countries to accelerate their economic growth through the application of modern technology in an appropriate policy framework as well as the advantages of relying on manufactured exports.