Economic Policy and Manufacturing Performance in Developing Countries

Economic Policy and Manufacturing Performance in Developing Countries

Edited by Oliver Morrissey and Michael Tribe

This book considers the impact of economic reforms on manufacturing performance and explores policy options for promoting manufacturing. Using country-specific case studies spanning Africa, South Asia, South East Asia and Latin America, the authors examine the evidence for and against both trade liberalisation and government support policy.

Chapter 4: Policy reform and Ugandan export competitiveness: a constant market share (CMS) analysis

Nichodemus Rudaheranwa

Subjects: development studies, development economics, economics and finance, development economics, industrial economics


Nichodemus Rudaheranwa 1 INTRODUCTION Trade deficits have been a major concern for developing countries, in particular sub-Saharan African countries, since the early 1980s. Efforts to alleviate trade deficits have comprised mainly policies to increase export earnings through increased volume and diversity (of composition and destination) of exports. Reducing the trade deficit has been an important objective, and expected outcome, of trade liberalisation. For an overview of the timing and types of the trade policy reforms see Greenaway (1998). However, for subSaharan Africa (SSA) the results of liberalisation have been mixed (Bennell, 1998). The impact of liberalisation on the external sector in many SSA countries has been at best gradual (Duncan and Jones, 1993; Belshaw et al., 1999). For example, Uganda adopted a comprehensive trade policy reform in 1987 that substantially reduced the bias against exports (Rudaheranwa, 1999) but after ten years the trade deficit remained high. Only a few major reforms were implemented before 1993. With the slow response of the export sector, SSA countries will find it difficult to reduce the growing debt burden. A study identifying factors impacting on the competitiveness of exports is therefore appropriate; that is the contribution of this chapter with an application to Ugandan exports. The chapter is organised as follows. The concept of export competitiveness is discussed in Section 2. Section 3 reviews the constant market share (CMS) method used for the analysis, while the data are described in Section 4. Section 5 discusses the results and Section...

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