The paper examines the aptness of labour market reform in a developing country using a three-sector Harris-Todaro model with agricultural dualism and a non-traded final commodity. The paper, contrary to the common belief, finds that liberalization in the labour market may be desirable from the...

Whether a liberalizing developing economy should implement the entire WTO-prescribed package and to what extent this is expedient, are the two burning questions, especially because available empirical evidence suggests that the developing countries have been facing substantial adjustment costs...