International Journal of Business and Social Science

ISSN 2219-1933 (Print), 2219-6021 (Online) DOI: 10.30845/ijbss

Political Economy of Trade Corridors of Land-Locked Developing Countries: Case Studies of Afghanistan and Bhutan
Milad Naeimi

Many developing countries have been able to take the advantage of global economy through integration into global value chains (GVCs) as an export-oriented model of development strategy. However, many land-locked developing countries (LLDCs) have been unable to do so. The aim of this paper is to find out the fundamental reason behind this inability. After comparing the two case studies of Afghanistan and Bhutan with the former as a relatively failed case and the latter a relatively successful one, the paper concludes that the underlying cause of divergence between LLDCs in their ability to integrate into GVCs is the political economy of trade corridors. Due to political economic reasons, transit countries prevent LLDCs’ to efficiently integrate into GVSs. Thus, it becomes inefficient for both domestic businesses and multinational corporations to invest in integration of such LLDCs into GVCs.

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