Introduction

The effects of trade liberalisation on the acceleration of growth and reduction in poverty remain on the central stope of both academic research and policy forums. A sizeable body of literature suggests that the open or outward-oriented economies perform better than the autarchic or inward-oriented economies. In the 1980s and 1990s, several developing countries adopted development strategies initiated by the Washington Consensus, which centred on the adoption of privatisation, liberalisation, and macroeconomic stabilisation strategies. Despite the enormous potential benefi ts of trade liberalisation, some developing countries and transitional economies – especially Latin American countries that followed the reform package prescribed by the Washington Consensus – have achieved little success. One of the possible reasons for such ineffi cacies has been that the reform package ignores the country’s specifi c economic and political conditions. In contrast, several East Asian countries have been successful with their export promotion strategy. The judgement of these development strategies, as such, continues to be highly disputed (Rodrik, 2010). Acemoglu and Robinson (2012) confl ate experiences of the development of nations and conclude that a country’s own institutions determine its success or failure. Trade policy reforms are akin to institutional reforms, and therefore a country’s own trade policy is crucial to its economic development (Rodrik, 2010; Le, 2014). However, even a country that succeeds in trade liberalisation cannot ensure that every individual in the country benefi ts from trade and growth, although most are likely to be better off, on average. Its success in economic development depends on how trade liberalisation affects household welfare and poverty in the country.