The WTO has increased international disciplines on export policy, but there is still scope for the use of export subsidies and other measures to promote exports. Under macroeconomic and trade reforms of the last decade, many countries have reduced or eliminated import measures which operate as...

Casual observation shows that many developing countries adopt certain strategic trade measures such as export subsidies and domestic currency devaluation to promote their exports. This paper analyzes two effects of these measures, the externality associated with the import of capital goods and...