ABSTRACT
Low-income countries appear especially constrained in their ability to take advantage of trade opportunities. Export volumes are generally small and concentrated in a few products, frequently in natural resources, and they commonly have more difficulties than middle-income countries shifting resources into new export activities. This is because adjustment is hampered by primitive transportation systems, inadequate public institutions, underdeveloped financial systems, low levels of human capital, and weak or non-existent safety nets, which make people particularly vulnerable to shocks. Consequently, despite some success with trade reform, export supply response in many low-income countries has been disappointing, particularly in the area of non-traditional exports.
