Ghanas inward-oriented tradepolicy resulted in a shift of resources awayfrom the profitable activity of growingcocoa, where it had an absolute advantagein the world economy, toward growingsubsistence foods and manufacturing,where it had no advantage. This inefficientuse of the countrys resources severelydamaged the Ghanaian economy and heldback the countrys economic development.
In contrast, consider the tradepolicy adopted by the South Koreangovernment. The World Bank hascharacterized the trade policy of SouthKorea as strongly outward-oriented.Untike in Ghana, the policies of theSouth Korean government emphasizedlow import barriers on manufacturedgoods （but not on agricultural goods） andincentives to encourage South Koreanfirms to export. Beginning in the late1950s,. the South Korean governmentprogressively reduced import tariffs froman average of 60 percent of the price of animported good to less than 20 percent inthe mid-1980s. On most nonagriculturalgoods, import tariffs were reduced to zero.In addition, the number of imported goodssubject to quotas was reduced from morethan 90 percent in the late 1950s to zeroby the early 1980s. Over the same period,South Korea progressively reduced thesubsidies given to South Korean exportersfrom an average of 80 percent of theirsales price in the late 1950s to an averageof less than 20 percent in 1965, and downto zero in 1984. With the exception of theagricultural sector （where a strong farmlobby maintained import controls）, SouthKorea moved progressively toward a freetrade stance.
