Trade liberalisation, governance, and the balance of payments: evidence from the Arab Maghreb Union

ABSTRACT

This paper explores the impact of trade liberalisation on the economies of the Arab Maghreb Union (AMU) as they attempt to reform their economies by liberalising trade with other nations in order to promote growth and increase welfare. We investigate the time period from 1995 to 2009 in terms of export growth, import growth, the balance of trade, and the balance of payments by using two different estimation techniques: ordinary least square, and panel-corrected standard-error models. Our empirical evidence shows that trade liberalisation did not enhance export growth in AMU countries during the given period. Trade liberalisation worsened the balance of trade and the balance of payments. Governance indicators turn out to be important factors in order to achieve the intended effects of trade liberalisation.

KEYWORDS:

• Trade policy – international trade organisations
• empirical studies of trade
• economic integration
• structure
• scope
• and performance of government
• trade policy
• factor movement policy
• foreign exchange policy

JEL CLASSIFICATION:

• F13
• F14
• F15
• H11
• O24

Disclosure statement

No potential conflict of interest was reported by the author(s).

ORCID

Roman Raab http://orcid.org/0000-0002-7704-404X