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Are Imports in Africa Responsive to Tariff Reductions?

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  • Chris Jones
  • Oliver Morrissey

Abstract

In the 1980’s and 1990’s many African countries liberalised their trade policy, although since the mid 1990s there are countries that did not alter tariffs. This allows us to analyse the effects of trade liberalisation on the change in imports using Difference-in-Differences techniques that allow us to evaluate the impact on imports of trade liberalisation at the general and sector-specific level. During the period of study (1996-2004), Algeria (in 1997), Ethiopia (2001), Egypt (1998), Tanzania (2000) and Uganda (2000) all liberalised their tariffs. These countries act as a ‘treatment’ group. In comparison, Cameroon, Gabon and Madagascar all left their tariffs unchanged. These countries act as our ‘control’ group or counterfactual. We compare the effects on imports for liberalising countries relative to non-liberalising countries, controlling for the timing of liberalisation, trends in import capacity (country effects) and in sector imports across countries (product market effects). Overall, using three methods of measuring imports, there is little evidence that suggests imports increased for the treatment group countries relative to the control group countries. This is true at the general and sector-specific levels.

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Paper provided by University of Nottingham, CREDIT in its series Discussion Papers with number 08/02.

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Handle: RePEc:not:notcre:08/02

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Keywords: Tariffs; Difference-in-Difference; liberalisation; Africa;

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  1. Kym Anderson & Will Martin & Dominique van der Mensbrugghe, 2006. "Would Multilateral Trade Reform Benefit Sub-Saharan Africans?," Journal of African Economies, Centre for the Study of African Economies (CSAE), Centre for the Study of African Economies (CSAE), vol. 15(4), pages 626-670, December.
  2. Amelia Santos-Paulino & A. P. Thirlwall, 2004. "The impact of trade liberalisation on exports, imports and the balance of payments of developing countries," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 114(493), pages F50-F72, 02.
  3. Amelia U. Santos-Paulino, 2000. "Trade Liberalisation and Export Performance in Selected Developing Countries," Studies in Economics, Department of Economics, University of Kent 0012, Department of Economics, University of Kent.
  4. Santos-Paulino, Amelia U., 2002. "The Effects of Trade Liberalization on Imports in Selected Developing Countries," World Development, Elsevier, Elsevier, vol. 30(6), pages 959-974, June.
  5. Wacziarg, Romain & Welch, Karen Horn, 2003. "Trade Liberalization and Growth: New Evidence," Research Papers, Stanford University, Graduate School of Business 1826, Stanford University, Graduate School of Business.
  6. Jeffrey D. Sachs & Andrew Warner, 1995. "Economic Reform and the Process of Global Integration," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, Economic Studies Program, The Brookings Institution, vol. 26(1, 25th A), pages 1-118.
  7. Ivohasina Fizara Razafimahefa & Shigeyuki Hamori, 2005. "Import Demand Function: Some Evidence from Madagascar and Mauritius," Journal of African Economies, Centre for the Study of African Economies (CSAE), Centre for the Study of African Economies (CSAE), vol. 14(3), pages 411-434, September.
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