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Background Paper on the IMF's Trade Restrictiveness Index


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  • Krishna, Kala


This paper reviews the Funds Trade Restrictiveness Index (IMF-TRI). It has three parts. The �rst part describes what the IMF-TRI is and the data needed to computeit. This part also traces the history of usage and the debate on the use of the IMF-TRI within the fund. It draws on internal Fund documentation as well as interviews conducted by Ms. Tan at IEO and the consultant. It also includes a discussion of the key documents produced internally and commissioned from external sources by the Fund. The second part asks what a good measure should be. There is no one size fits all measure as trade restrictiveness is multi dimensional. However, there is no reason to rely on a single measure of trade restrictiveness to capture all these di-mensions. Depending on how comprehensive a measure is needed, one or a variety of measures may be deemed appropriate to look at. The strengths and weaknesses of the IMF-TRI are highlighted and existing measures briefly surveyed. The third part suggests that an approach based on work by James Anderson, Peter Neary, and Robert Feenstra (ANF-TRI), together with other indicators, be used by the IMF in the future. The approach is relatively flexible and can be used to construct a basic measure of trade restrictiveness or a variety of more comprehensive ones as described in this section. This approach has been implemented by a group of economists at or formerly at the World Bank(H.L. Kee, M. Olarrelanga, A. Nicata). The relevant indices are available online. The averages of some of these indices are being reported in the Global Monitoring Report (GMR) which is put out under the joint auspices of the Bank, Fund, WTO and UNCTAD, and has presumably been vetted by all of the above. This provides additional legitimacy for the Funds use of the index. Moreover, the Bank is committed to updating these indices annually for the GMR.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 21316.

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Date of creation: 31 Mar 2009
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Handle: RePEc:pra:mprapa:21316

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Keywords: IMF; Trade Restrictiveness Index;

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  1. James E. Anderson & J. Peter Neary, 2003. "The Mercantilist Index of Trade Policy," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 44(2), pages 627-649, 05.
  2. Hiau Looi Kee & Alessandro Nicita & Marcelo Olarreaga, 2008. "Import Demand Elasticities and Trade Distortions," The Review of Economics and Statistics, MIT Press, vol. 90(4), pages 666-682, November.
  3. Kee, Hiau Looi & Nicita, Alessandro & Olarreaga, Marcelo, 2006. "Estimating trade restrictiveness indices," Policy Research Working Paper Series 3840, The World Bank.
  4. James Anderson, 1995. "Trade Restrictiveness Benchmarks," Boston College Working Papers in Economics, Boston College Department of Economics 290., Boston College Department of Economics.
  5. Edwards, Sebastian, 1992. "Trade orientation, distortions and growth in developing countries," Journal of Development Economics, Elsevier, Elsevier, vol. 39(1), pages 31-57, July.
  6. Francisco Rodriguez & Dani Rodrik, 1999. "Trade Policy and Economic Growth: a Skeptic's Guide to the Cross-National Evidence," Working Papers, Economic Research Forum 9912, Economic Research Forum, revised Apr 1999.
  7. Arvind Subramanian, 2000. "Trade and Trade Policies in Eastern and Southern Africa," IMF Occasional Papers 196, International Monetary Fund.
  8. J Anderson & J.P. Neary, 1994. "Measuring the Restrictiveness of Trade Policy," CEP Discussion Papers, Centre for Economic Performance, LSE dp0186, Centre for Economic Performance, LSE.
  9. David H. Romer & Jeffrey A. Frankel, 1999. "Does Trade Cause Growth?," American Economic Review, American Economic Association, American Economic Association, vol. 89(3), pages 379-399, June.
  10. Pritchett, Lant, 1991. "Measuring outward orientation in developing countries : can it be done?," Policy Research Working Paper Series 566, The World Bank.
  11. Edwards, Sebastian, 1993. "Openness, Trade Liberalization, and Growth in Developing Countries," Journal of Economic Literature, American Economic Association, American Economic Association, vol. 31(3), pages 1358-93, September.
  12. Kala Krishna, 2005. "Understanding Rules of Origin," NBER Working Papers 11150, National Bureau of Economic Research, Inc.
  13. Kala Krishna & Anne Krueger, 1995. "Implementing Free Trade Areas: Rules of Origin and Hidden Protection," NBER Working Papers 4983, National Bureau of Economic Research, Inc.
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