PORTFOLIO MODELS AND PLANNING FOR EXPORT DIVERSIFICATION - MALAWI, TANZANIA AND ZIMBABWE

Evidence is presented regarding strengths and limitations of portfolio approaches as applied to diversifying export earnings. An empirical a pplication using data from Malawi, Tanzania, and Zimbabwe is used to d emonstrate these strengths and limitations. Modifications of the typic al portfolio approach to export diversificaiton are presented; these m odifications help make the approach more plausible for use in developi ng countries. The modified approach is shown to provide guidance to po licy-makers who seek simultaneously to increase export earnings and re duce their instability.