00620552

Component

http://onlinepubs.trb.org...trr/1991/1313/1313-014.pdf

https://scholar.google.co...ches&publication_year=1991

Political changes in Eastern Europe and Soviet democratic movements are likely to bring about changes in trade among nations and increases in transportation requirements. The impact of these changes in freedom, market structure, and governmental status on world trade is estimated in this paper. The primary regional beneficiaries of change are identified. Using a data base consisting of 237 country pairs that report on trade flows, a gravity-type model is calibrated in which 1988 trade flows are related to freedom level, government type, socioeconomic variables, country GNP, shipment times, and extent of free market economy. The model is then used to forecast future (1993) trade under several political scenarios. Results show that baseline trade growth (i.e., trend increases in country GNP) will be about 31% during 1988 to 1993; reunification of Germany or freeing up of Communist bloc governments and economies will increase trade by an additional 3.5 to 11.5% over the base case. Most of the increases will be limited to trade with Eastern European and Communist bloc nations. On the other hand, a "world freedom" scenario would increase trade about 70%, most dramatically in African and Asian developing nations. This compares with a 57% increase from vastly improved shipping infrastructure, the benefits of which would flow primarily to currently industrialized nations. It is concluded that trade will increase more if market economies are introduced, rather than if transportation infrastructure is improved. In summary, nations now not free should be encouraged to become so, not be given more transportation infrastructure to increase trade. The shortest path to increased trade is increased freedom.

This paper appears in Transportation Research Record No. 1313, Freight Transportation: Truck, Rail, Water, and Hazardous Materials 1991. Distribution, posting, or copying of this PDF is strictly prohibited without written permission of the Transportation Research Board of the National Academy of Sciences. Unless otherwise indicated, all materials in this PDF are copyrighted by the National Academy of Sciences. Copyright © National Academy of Sciences. All rights reserved

01407143

p. 106-114

1991

Transportation Research Record

030905124X

Figures (5) ; References (3) ; Tables (4)

Economic factors; Estimating; Forecasting; Governments; Gravity models; Gross national product; Impacts; International; International trade; Markets; Private enterprise; Shipping; Socioeconomic factors

Freedom; Socioeconomic data

Economics; Highways; Marine Transportation; Planning and Forecasting; Society

TRIS, TRB

Mar 31 1992 12:00AM

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