Jean Waelbroeck

The sensitivity of developing countries to external shocks in an interdependent world

Abstract North-South interdependence is illustrated by means of a general equilibrium model, in which the rural and urban sectors are treated entirely separately and urban real wages are downward rigid. We explain why such an approach may be more meaningful for long-run analysis than one that stresses the role of demand. The models properties are illustrated by a theoretical analysis based on a simplified version of the system, and by simulations based on assumptions made by World Bank Staff in the 1983 World Development Report.

The impact of protection on developing countries: a general equilibrium analysis

This paper presents the results of an experiment in using a general equilibrium model to investigate the implications of protectionism in a world with rigidities. It reflects two aspects of policy-making today. One is the strong resistance of broad groups of the population to reductions in per capita incomes. The other is the efforts of pressure groups to use protection (and other means) to manipulate the distribution of incomes in their favour. To the extent that they are successful, these efforts extract rents from the economy and reduce its efficiency, making it more difficult to satisfy the per capita income objectives of the rest of the population.

Measuring the Degree or Progress of Economic Integration (Main Paper, Working Group A)

This paper presents leading ideas in post-war research on integration. In the spirit of Tinbergen (1952), the goal is understood to be the clarification of the connection between the instruments and objectives of economic policy. In the present context, the instruments are the tariff and nontariff barriers that hamper integration. Trade and capital flows are, in Tinbergen’s terminology, ‘irrelevant variables’, interesting only because of their impact on the objectives of policy makers. The latter are variables that affect welfare and its distribution to consumers.