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RESEARCH PAPER NO. 884
TRADE
LIBERALIZATION, RESOURCE DEGRADATION AND
INDUSTRIAL POLLUTION IN DEVELOPING COUNTRIES:
AN INTEGRATED ANALYSIS
BY
IAN
COXHEAD & SISIRA JAYASURIYA
NOVEMBER 2003
Department of Economics. University of Melbourne.
Melbourne Victoria 3010 Australia
"Environmental damage"
is in reality many different types of phenomena,
each with a unique set of causes and characteristics.
We present an analytical model identifying
intersectoral and interregional links of
economy and environment, and explore consequences
of trade policy and world price changes.
The model contains explicit spatial
and institutional features relevant to developing
economies. We show that similar trade
or policy shocks can have different effects,
depending on initial economic structure,
trade orientation and policies. Further,
when there is more than one sectoral source
of environmental damage, a policy or price
shock may have unexpected environmental
and welfare results.
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