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The Value of Making Commitments Externally: Evidence from WTO Accessions

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  • Man-Keung Tang

    (International Monetary Fund)

  • Shang-Jin Wei

    (Columbia University, NBER)

Abstract

This paper studies the value of external commitment to policy reforms in the case of WTO/GATT accessions. The accessions often entail reforms that go beyond narrowly defined trade liberalization, and have to overcome fierce resistance in the acceding countries, as reflected in protracted negotiations. We study the growth and investment consequences of WTO/GATT accessions, with attention to a possible selection bias. We find that the accessions tend to raise income, but only for those countries that were subject to rigorous accession procedures. Policy commitments associated with the accessions were helpful, especially for countries with poor governance.

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Bibliographic Info

Paper provided by Hong Kong Institute for Monetary Research in its series Working Papers with number 152009.

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Length: 36 pages
Date of creation: Apr 2009
Date of revision:
Handle: RePEc:hkm:wpaper:152009

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Keywords: Trade; Growth; Economic Reforms;

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References

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Citations

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Cited by:
  1. Kent Jones & Yunwei Gai, 2013. "Joining the WTO: Why Does It Take So Long?," Open Economies Review, Springer, Springer, vol. 24(4), pages 695-716, September.
  2. Axel Dreher & Stefan Voigt, 2008. "Does Membership in International Organizations Increase Governments’ Credibility? Testing the Effects of Delegating Powers," KOF Working papers, KOF Swiss Economic Institute, ETH Zurich 08-193, KOF Swiss Economic Institute, ETH Zurich.
  3. Daniel Brou & Michele Ruta, 2012. "A Commitment Theory of Subsidy Agreements," CESifo Working Paper Series 3945, CESifo Group Munich.
  4. Mark Copelovitch & David Ohls, 2012. "Trade, institutions, and the timing of GATT/WTO accession in post-colonial states," The Review of International Organizations, Springer, Springer, vol. 7(1), pages 81-107, March.
  5. Amit K. Khandelwal & Peter K. Schott & Shang-Jin Wei, 2013. "Trade Liberalization and Embedded Institutional Reform: Evidence from Chinese Exporters," American Economic Review, American Economic Association, American Economic Association, vol. 103(6), pages 2169-95, October.
  6. Theo S. Eicher & Christian Henn, 2008. "In Search of WTO Trade Effects: Preferential Trade Agreements Promote Trade Strongly, But Unevenly," Working Papers, University of Washington, Department of Economics UWEC-2008-22-FC, University of Washington, Department of Economics.
  7. Juyoung Cheong & Do Won Kwak & Kam Ki Tang, 2013. "WTO Trade Effects and Identification Problems: Why Knowing The Structural Properties of WTO Memberships Matters?," Discussion Papers Series 491, School of Economics, University of Queensland, Australia.
  8. Hans Pitlik & Björn Frank & Mathias Firchow, 2010. "The demand for transparency: An empirical note," The Review of International Organizations, Springer, Springer, vol. 5(2), pages 177-195, June.
  9. Paola Conconi & Carlo Perroni, 2014. "Special and Differential Treatment of Developing Countries in the WTO," RSCAS Working Papers, European University Institute 2014/60, European University Institute.
  10. Hasanat Shah, Syed & Hasnat, Hafsa & li, Junjiang, 2010. "Pre and post WTO analysis of south Asian economies: evidence from panel data estimation," MPRA Paper 35634, University Library of Munich, Germany, revised 2011.

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