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Periodical article Periodical article Leiden University catalogue Leiden University catalogue WorldCat catalogue WorldCat
Title:Economic Gains from Integration among Developing Countries: The Case of the North African Arab Maghreb Union (AMU)
Author:Testas, AbdelazizISNI
Periodical:Development Policy Review
Geographic term:Algeria
Subjects:Union du Maghreb Arabe
economic development
Economics and Trade
Inter-African Relations
Abbreviation:AMU=Arab Maghreb Union
External link:https://doi.org/10.1111/1467-7679.00032
Abstract:This article assesses the significance of economic integration among developing countries, taking the Arab Maghreb Union (AMU), established in 1989, as a case study. It estimates the import expansion effects of the AMU, in total and by commodity, as seen from the perspective of Algeria. It follows a supply-demand approach which was developed by P.J. Verdoorn (1960), L.H. Janssen (1961) and C.K. Clague (1971, 1972) and elaborated by R. Pomfret (1986). The model draws its strength from the theory of international trade in which three main elasticities are distinguished: import price elasticity, export supply elasticity and substitution elasticity. The main conclusion is that, while trade expansion effects can be demonstrated, their impact on the Algerian economy is quite modest. Even when the results are adjusted up for underestimation, the impact is found to be well below 1 percent of the country's GDP. These results are consistent with earlier findings on the topic of integration among developing countries in general and among the Arab countries in particular. On the other hand, they do not necessarily suggest that integration among the Arab Maghreb countries, and among developing countries in general, is detrimental or unjustifiable. App., bibliogr., notes, ref.