Open economies review6:369-385 (1995) © 1995 Kluwer Academic Publishers. Printed in The Netherlands. From Protectionism to Free Trade Fever? Recent Reforms in Developing Countries JUDITH M. DEAN School of Advanced International Studies, Johns Hopkins University,Washington, D.C., U.S.A. Key words: trade liberalization, developing countries Abstract Duringthe 1980s,increasingnumbersof developingcountriesunilaterallyliberalizedtheir trade regimes. This paper presents an overviewof this dramatic shift from protectionism toward freer trade. South Asia, Latin America, and East Asia have implemented extensive reforms, yet each region has shown a distinct difference in approach and in the degree of liberalization actually achieved. Latin America standsout as movingsharplytowardthe levelof opennessof the EastAsian NewlyIndustrializedCoun- tries (NICs). Only in Africa is there little progress toward freer trade. There seems to be no doubt that increasing numbers of developing countries are unilaterally liberalizing their trade regines. During the 1980s liberalization seemed to be contagious in the developing world. In Asia it spread from Taiwan and Korea to Southeast Asia and on to China. In Latin America, it spread from Chile to Mexico and beyond. Dornbusch (1992) described this phenomenon as a broad shift "from severe and destructive protection to free trade fever." Indeed, it appears that "the import substitution consensus of the previous decades.., has all but evaporated" (Rodrik 1992). "Trade Policy Reform in Developing Countries since 1985: a Review of the Evi- dence" (Dean, Desai, and Riedel 1994) (henceforth referred to as TPR) documents this dramatic unilateral trade liberalization in the developing world.~ It examines both the extent and the character of trade policy reform in 32 countries 2 in South Asia, Africa, Latin America, and East Asia, from the mid-1980s to 1992/93. TPR discusses changes in tariffs, nontariff barriers, foreign exchange markets, and ex- port impediments and incentives in these countries. Data are presented on levels, range and disperson of tariffs, the coverage of quantitative restrictions (QRs), and black market premia for the mid-1980s and the early 1990s. 3 A brief look at these 32 countries reveals that protectionism was still widespread and severe in the mid-1980s. Though some movement toward liberalization had taken place in the earlier part of the decade in the four South Asian countries, import-competing sectors were still protected with very high tariffs. Bangladesh, Pakistan, and India also maintained highly complex and extensive systems of QRs (bans, specific quotas, licensing requirements, and other restraints). Sri Lanka was the exception, having replaced virtually all QRs with tariffs in 1977. Significant ex- port controls were still maintained in all countries,4 though some export incentive