Trade Reform: Synergies between Open Markets and Other Economic Reforms

The merits of trade liberalisation and more open markets have been strongly argued in economic literature. The underlying theme that trade liberalisation is not an end in itself. It is a means of achieving greater economic activity and wealth. Realising its potential benefits does not happen by reducing barriers to trade and market distorting industry support alone (Sachs and Warner 1995). Efficient transmission of the price signals that indicate what can be produced most profitably, and a secure business environment are also required. Many of the reforms that are necessary for such conditions relate to the nature and efficiency of government, educational and legal institutions.