Towards development in landlocked economies

This paper sets out with three objectives. Firstly, it reviews the theoretical and empirical literature on the relationship between the condition of being a landlocked developing country and the degree of economic development attained, measured by per capita income. Secondly, it contributes to the theoretical literature on the subject by suggesting a new possible reason why landlocked countries may have a low level of development: the greater relative uncertainty to which landlockedness gives rise may have a negative effect on investment incentives in the tradable sector of such countries. Thirdly, it suggests that development policy for landlocked countries should focus on investment in transport infrastructure and on regional integration.