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The GATS and liberalization in a natural-resource rich country

Author

Listed:
  • Hatem Samman
  • Sheikh Shahnawaz

Abstract

We highlight the role of natural resources in countries that use resource revenues to subsidize employment in state-owned services sectors by developing a model of service provision where domestic incumbents and a foreign entrant compete. We find that when natural resource prices have a higher likelihood of increasing, domestic firms control most of the market share but that industry output drops. However, the output of the services industry rises with domestic firms losing market share when natural resource prices are likely to go down. This suggests that a government focused narrowly only on the growth and development of its economy would prefer services liberalization when natural resource prices are likely to be higher.

Suggested Citation

  • Hatem Samman & Sheikh Shahnawaz, 2007. "The GATS and liberalization in a natural-resource rich country," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 16(2), pages 271-292.
    • Handle: RePEc:taf:jitecd:v:16:y:2007:i:2:p:271-292
    DOI: 10.1080/09638190701325748
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