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The trade restrictiveness index : an application to Mexican agriculture

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  • Anderson, James E.
  • Bannister, Geoffrey

Abstract

Agricultural markets in Mexico, as elsewhere, are distorted by domestic subsidies as well as international trade policies. To measure domestic distortions in agriculture and compare them internationally, analysts have used"producer subsidy equivalent"(a production-share weighted average of producer subsidies) and"consumer subsidy equivalent"indices, as well as the familiar trade-weighted averages of tariffs and tariff equivalents of quotas. All these indices lack a theoretical foundation, as is well-known. Moreover, in the absence of a connection between the three partial indices of consumption, production, and trade distortion, inferences about the trade restrictiveness of all three policies are illegitimate. This paper allies a new concept, the trade restrictiveness index (TRI), to the evaluation of Mexican agricultural reform from 1985 to 1989. It demonstrates the feasibility of the new method and its theoretical and practical advantages over standard techniques, while at the same time providing an assessment of a particularly significant reform episode.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 874.

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Date of creation: 31 Mar 1992
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Handle: RePEc:wbk:wbrwps:874

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Related research

Keywords: Economic Theory&Research; TF054105-DONOR FUNDED OPERATION ADMINISTRATION FEE INCOME AND EXPENSE ACCOUNT; Markets and Market Access; Access to Markets; Environmental Economics&Policies;

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Cited by:
  1. Anderson, James E & Neary, J Peter, 1993. "Domestic Distortions and International Trade," CEPR Discussion Papers, C.E.P.R. Discussion Papers 786, C.E.P.R. Discussion Papers.
  2. Peter J. Lloyd & Johanna L. Croser & Kym Anderson, 2009. "Global Distortions to Agricultural Markets: New Indicators of Trade and Welfare Impacts, 1955 to 2007," School of Economics Working Papers, University of Adelaide, School of Economics 2009-13, University of Adelaide, School of Economics.
  3. Anderson, James E., 1992. "Tariff index theory," Policy Research Working Paper Series 1023, The World Bank.
  4. Anderson, Kym & Croser, Johanna L. & Lloyd, Peter J, 2009. "How Do Agricultural Policy Restrictions to Global Trade and Welfare Differ Across Commodities?," CEPR Discussion Papers, C.E.P.R. Discussion Papers 7230, C.E.P.R. Discussion Papers.
  5. Jiandong Ju & Kala Krishna, 1997. "Evaluating Trade Reform Using Ex-Post Criteria," NBER Working Papers 6152, National Bureau of Economic Research, Inc.
  6. John Baffes, 1998. "Structural reforms and price liberalization in Mexican agriculture," Journal of International Development, John Wiley & Sons, Ltd., vol. 10(5), pages 575-587.
  7. Ju, Jiandong & Krishna, Kala, 2000. "Necessary conditions for welfare improving reforms," Economics Letters, Elsevier, Elsevier, vol. 67(2), pages 173-178, May.

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