Survey of the literature on successful strategies and practices for export promotion by developing countries

Increasing exports ranks among the highest priorities of any government in both developed and developing countries. The reason is that favouring domestic export performance is predicted to be conducive to economic growth (for reviews of the empirical literature on the relation between export and growth see Giles and Williams (2000) and Harrison and Rodríguez-Clare (2009); see also UNCTAD (2008b)). Export promotion policies (EPPs) are the set of policies and practices aimed at directly or indirectly supporting export in a given country. Export promotion policies have been widely used by most countries around the world for a long time. Reviewing the past and present international experiences with EPPs and assessing the effectiveness of the different policies is hence crucial to provide governments in developing countries with some guidelines to help identify the best practices so far. This is the objective of the present paper. The term EPP may encompass a large set of policy interventions, ranging from exchange rate policies (Bhagwati 1988) to any ‘specific measures that generally amount to the government bearing a portion of the private cost of production of export’ (OECD 1984). In general EPPs involve all the measures and programmes aimed at assisting current and potential exporters. These measures may be addressed to either national exporters or multinational enterprises producing locally (or both). Yet, in the last decades the set of policies and measures available to governments to influence exporting has been gradually restricted by the WTO. For instance, the use of selective export subsidies is now severely limited for most countries. Nonetheless, WTO rules do not prohibit all types of EPPs. Policies are still allowed when they promote (a) domestic investment in research and development, (b) regional development, (c) environment friendly activities. Notably, these may be useful instruments to increase export quality and export diversification. As we will argue below, it is crucial to consider the present and future constraints when discussing the available options for developing countries in designing their own EPPs.