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Estimating the Constraints to Trade of Developing Countries

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Author Info

  • Jean-Jacques Hallaert
  • Ricardo Cavazos Cepeda
  • Gimin Kang

Abstract

The severity of binding constraints to trade expansion in developing countries and the importance of the complementary policies that will maximize the impact of trade reforms on trade and economic growth are identified and quantified in this report. As trade-related needs of developing countries are numerous, such quantification is needed to identify the most binding constraints to guide the sequencing of reforms and aid-for-trade interventions. The constraints to trade expansion are largely country specific. However, countries which share important characteristics may face similar binding constraints. An econometric analysis is undertaken for as many partner countries as possible to produce an \unrestricted sample. that can be used as a benchmark against which special country groupings can be assessed. The econometric work relies on experimentation to identify and rank (based on their relative severity) the most binding constraints for each country grouping. Two case studies, on Azerbaijan and Uganda, illustrate the mechanisms of the econometric work and the importance of several variables not captured because of data limitations

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Bibliographic Info

Paper provided by OECD Publishing in its series OECD Trade Policy Papers with number 116.

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Date of creation: 24 Jun 2011
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Handle: RePEc:oec:traaab:116-en

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Related research

Keywords: resource rich countries; trade expansion; aid for trade; binding constraints; developing countries trade; taxonomy of constraints; landlocked countries; small and vulnerable economies;

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  1. Trade constraints of developing countries
    by Economic Logician in Economic Logic on 2011-07-26 14:14:00
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Cited by:
  1. Borchert, Ingo & Gootiiz, Batshur & Grover, Arti & Mattoo, Aaditya, 2012. "Landlocked or policy locked ? how services trade protection deepens economic isolation," Policy Research Working Paper Series 5942, The World Bank.

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