International Trade, Immiserizing Growth, and the Prisoner's Dilemma

bibliographic database
Line

Periodical article

Title:	International Trade, Immiserizing Growth, and the Prisoner's Dilemma
Author:	Kimenyi, Mwangi S.
Year:	1988
Periodical:	Eastern Africa Economic Review
Volume:	4
Issue:	1
Period:	June
Pages:	53-63
Language:	English
Geographic term:	Kenya
Subjects:	economic development Economics and Trade
Abstract:	Studies of 'immiserizing growth' - the theoretical possibility for a country's welfare to decline despite increased production - usually argue that this is only possible in a large country where increased production of an export commodity worsens that country's terms of trade. The present study shows that this outcome is possible for small countries too. Though increased production of an export commodity by a single small country may not 'immiserize' it, increased exports by many can. The lure of large gains for a country that exports more while others export less creates a prisoner's dilemma. Each country will strive to produce and export more. The terms of trade will fall, perhaps enough to cause immiserizing growth. Data for Kenya for the period 1963-1982 provide empirical support for these theoretical arguments and raise the question of whether developing countries should rely mainly on exports of agricultural commodities. Bibliogr., notes, ref.