Explaining the trade reform wave of 1985–1995
The decade from 1985 to 1995 saw the greatest reduction in global trade barriers in world history. This column explores the sudden burst of unilateral trade reforms adopted by many developing countries in that period. Ideas were changing about the merits of exchange rate adjustment over import controls. As more economists were appointed as senior policymakers around the world, they sought to shift policy to earning more foreign exchange, favouring devaluation and liberalisation of import controls. The ‘third wave’ of democratisation also played a role.