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duties returned to firms (via drawback or exemption) and actual duty collection rising from 25% in 1983 to 60% in 1987.4 In both Mauritius and Mexico, exemption schemes have been significantly more successful than drawback arrangements. Mauritius' duty exemption scheme is used by relatively large firms that produce regularly for both domestic and import markets; the drawback scheme, which involves cumbersome procedures and significant delays prior to repayment, is used by few manufacturers. In Mexico, imports valuing $2.8 billion were processed in 1987 via that country's temporary import duty exemption scheme, while the duty drawback scheme was used for only $200 million of imports; the coverage of both schemes was narrow, with only 463 firms taking advantage of the temporary admissions, and 186 r rms the duty drawback, schemes.'* Morocco's temporary admissions scheme (a duty exemption scheme in the nomenclature used here) apparently has worked well, with continual reduction in the bureaucratic requirements and processing time associated with gaining access to duty-free imports by exporters.7 As for Jamaica, Pakistan and Tunisia, the limited evidence available suggests that administrative sluggishness in responding to applications and difficulties in managing the array of input-output coefficients have severely circumscribed the utility to putative exporters of drawback and exemption shemes.

Two patterns emerge from this review of experience. First, enclave arrangements such as bonded factories and export processing zones appear to be the most readily implementable of the trade neutrality schemes. However, insofar as enclaves separate exporters from the domestic economy, these schemes seem to do relatively little to diffuse more broadly the positive learning externalities associated witL exports or to broaden the constituency for further liberal reform. Second, countries with sufficiently strong organizational capabilities appear able to make effective use of drawback and exemption schemes,' thereby capturing many of the benefits associated with exports and sustaining the transition to a liberal policy environment.

# IV. ANALYSIS AND IMPLICATIONS OF COUNTRY EXPERIENCE

Two tasks remain for this final section of the paper. The first task is to lay out some general propositions that account for the variations among countries and policies in the I Additional tax exemptions provided to firmns promoted by the Board of Investmen. amounted to more than 120% of duty collected on intermediates and raw materials. Data are from The World Bank, Thailand: Country Economic Memorandum. 1989 p. 63.

* Details are from The World Bank, Mexico: Trade Policy Reform and Economic Adjustment, 1988, p. 69. According to that report, there are several thousand exporting firms (excluding the maquilas) in Mexico, with the 600 largest accounting for less than 60% of total non-oil exports.

" For this judgement, see The World Bank Morocco: The Impact of Liberalization. Report No. 6714-MOR, March 15, 1988, p. 25.

^ Alog with the countries discussed in the text, both Taiwan and especially Korea made ateive use of duty drawback and exemption schemes for direct as well as indirect exporters in the course of their successful efforts at outward-oriented industrial development.