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Estimating trade restrictiveness indices

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Author Info
Kee, Hiau Looi
Nicita, Alessandro
Olarreaga, Marcelo

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Abstract

The objective of this paper is to provide indicators of trade restrictiveness that include both measures of tariff and nontariff barriers for 91 developing and industrial countries. For each country, the authors estimate three trade restrictiveness indices. The first one summarizes the degree of trade distortions that each country imposes on itself through its own trade policies. The second one focuses on the trade distortions imposed by each country on its import bundle. The last index focuses on market access and summarizes the trade distortions imposed by the rest of the world on each country's export bundle. All indices are estimated for the broad aggregates of manufacturing and agriculture products. Results suggest that poor countries (and those with the highest poverty headcount) tend to be more restrictive, but they also face the highest trade barriers on their export bundle. This is partly explained by the fact that agriculture protection is generally larger than manufacturing protection. Nontariff barriers contribute more than 70 percent on average to world protection, underlying their importance for any study on trade protection.

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Paper provided by The World Bank in its series Policy Research Working Paper Series with number 3840.

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Date of creation: 01 Feb 2006
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Handle: RePEc:wbk:wbrwps:3840

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Related research
Keywords: Free Trade; Economic Theory&Research; Trade Policy; Consumption; Markets and Market Access;

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  1. Bernard Hoekman & Francis Ng & Marcelo Olarreaga, 2004. "Agricultural Tariffs or Subsidies: Which Are More Important for Developing Economies?," World Bank Economic Review, Oxford University Press, vol. 18(2), pages 175-204.
  2. Feenstra, R.C., 1995. "Estimating the Effects of Trade Policy," Papers 95-10, California Davis - Institute of Governmental Affairs.
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  3. Edward E. Leamer, 1986. "Cross Section Estimation of the Effects of Trade Barriers," UCLA Economics Working Papers 417, UCLA Department of Economics. [Downloadable!]
  4. Hiau Looi Kee & Nicita, Alessandro & Olarreaga, Marcelo, 2004. "Import demand elasticities and trade distortions," Policy Research Working Paper Series 3452, The World Bank. [Downloadable!]
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  5. 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, vol. 44(2), pages 627-649, 05. [Downloadable!] (restricted)
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  6. Scott Bradford, 2003. "Paying the Price: Final Goods Protection in OECD Countries," The Review of Economics and Statistics, MIT Press, vol. 85(1), pages 24-37, November. [Downloadable!] (restricted)
  7. Andriamananjara, Soamiely & Dean, Judith M. & Feinberg, Robert & Ferrantino, Michael J. & Ludema, Rodney & Tsigas, Marinos, 2004. "The Effects of Non-Tariff Measures on Prices, Trade, and Welfare: CGE Implementation of Policy-Based Price Comparisons," Working Papers 15863, United States International Trade Commission, Office of Economics. [Downloadable!]
  8. Nogues, Julio J & Olechowski, Andrzej & Winters, L Alan, 1986. "The Extent of Nontariff Barriers to Industrial Countries' Imports," World Bank Economic Review, Oxford University Press, vol. 1(1), pages 181-99, September.
  9. Anderson, James E & Bannister, Geoffrey J & Neary, J Peter, 1995. "Domestic Distortions and International Trade," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 36(1), pages 139-57, February. [Downloadable!] (restricted)
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  10. Jong-Wha Lee & Phillip Swagel, 1994. "Trade barriers and trade flows across countries and industries," International Finance Discussion Papers 476, Board of Governors of the Federal Reserve System (U.S.). [Downloadable!]
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  11. Harrigan, James, 1997. "Technology, Factor Supplies, and International Specialization: Estimating the Neoclassical Model," American Economic Review, American Economic Association, vol. 87(4), pages 475-94, September. [Downloadable!] (restricted)
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  12. Anderson, James E & Neary, J Peter, 1992. "Trade Reform with Quotas, Partial Rent Retention, and Tariffs," Econometrica, Econometric Society, vol. 60(1), pages 57-76, January. [Downloadable!] (restricted)
  13. Trefler, Daniel, 1993. "Trade Liberalization and the Theory of Endogenous Protection: An Econometric Study of U.S. Import Policy," Journal of Political Economy, University of Chicago Press, vol. 101(1), pages 138-60, February. [Downloadable!] (restricted)
  14. James E. Anderson & J. Peter Neary, 2004. "Welfare versus Market Access: The Implications of Tariff Structure for Tariff Reform," Boston College Working Papers in Economics 601, Boston College Department of Economics. [Downloadable!]
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  15. J Anderson & J.P. Neary, 1994. "Measuring the Restrictiveness of Trade Policy," CEP Discussion Papers dp0186, Centre for Economic Performance, LSE.
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  16. Anderson, James E, 1998. "Trade Restrictiveness Benchmarks," Economic Journal, Royal Economic Society, vol. 108(449), pages 1111-25, July. [Downloadable!] (restricted)
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  17. Anderson, James E & Neary, J Peter, 1996. "A New Approach to Evaluating Trade Policy," Review of Economic Studies, Blackwell Publishing, vol. 63(1), pages 107-25, January. [Downloadable!] (restricted)
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  18. Alan V. Deardorff & Robert M. Stern, 1997. "Measurement of Non-Tariff Barriers," OECD Economics Department Working Papers 179, OECD, Economics Department. [Downloadable!]
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