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Can trade liberalisation bring benefits to the war-affected regions and create economic stability in post-war Sri Lanka?

Athula Naranpanawa (Department of Accounting, Finance and Economics, Griffith University, Brisbane, Australia)
Jayatilleke Bandara (Department of Accounting, Finance and Economics, Griffith University, Brisbane, Australia)

International Journal of Social Economics

ISSN: 0306-8293

Article publication date: 4 December 2017

563

Abstract

Purpose

There is a large body of literature on the link between trade liberalisation, growth and poverty. However, less attention has been paid to the relationship between trade and regional disparities. The purpose of this paper is to identify and quantify the regional impacts of trade liberalisation, particularly in the war-affected regions and to understand to what extent trade reforms can contribute to the post-war recovery process and long-term economic and political stability in Sri Lanka.

Design/methodology/approach

The authors developed a single country multi-regional computable general equilibrium (CGE) model for the Sri Lankan economy to meet the need for a detailed country study as emphasised in the recent literature.

Findings

Both short-run and long-run results suggest that all regions including war-affected regions in the country gain from trade liberalisation, although gains are uneven across regions. Furthermore, the results suggest that war-affected regions gain more relative to some other regions in the long run.

Originality/value

According to the best of the authors’ knowledge within country regional impact of trade liberalisation using a multi-regional CGE model has never been attempted for Sri Lanka. The results of this study, even though based on Sri Lankan data, will be relevant to other developing countries engulfed in internal conflicts with regional economic disparities.

Keywords

Citation

Naranpanawa, A. and Bandara, J. (2017), "Can trade liberalisation bring benefits to the war-affected regions and create economic stability in post-war Sri Lanka?", International Journal of Social Economics, Vol. 44 No. 12, pp. 1710-1726. https://doi.org/10.1108/IJSE-06-2016-0169

Publisher

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Emerald Publishing Limited

Copyright © 2017, Emerald Publishing Limited

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