ABSTRACT
This chapter examines impact of trade liberalization on the distribution of income depends largely on structural linkages of the exporting sectors to the rest of economy and on institutional factors which include the structure of ownership of the means of production and the role of the government in promoting human development. It focuses on particular institutional framework of countries such as Taiwan and South Korea that were successful in equalizing the distribution of income within the context of trade liberalization. The chapter presents a brief review of the way Mexico has attempted to liberalize trade in the 1980s, contrasting its experience with that of Taiwan and South Korea. Industrialization in Mexico was promoted by a policy of import substitution which protected the domestic market from international competition. East Asian countries were among the first developing countries to undertake thoroughgoing policies of trade liberalization.
