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A Quantitive Evaluation of the Potential Effects of Trade Policy Reversal in Sri Lanka: A Computable General Equilibrium (CGE) Analysis

Listed author(s):
  • Liyanaarachchi, Tilak Susantha
  • Bandara, Layatilleke S.
  • Naranpanawa, Athula

In recent years there has been a trend in rising protectionism and a reversal of trade policy reforms in some developed and developing countries, particularly after the global financial crisis. Although some researchers and practitioners have discussed recent trends in trade policy reversal in both developed and developing countries in recent years, no serious attempts have been made to examine the effects of trade policy reversal in a developing country within an economy-wide framework. The current paper attempts to fill this research gap by answering the question: Can developing countries benefit from trade policy reversals? The study focuses particularly on the case of Sri Lanka. To address this central research aim the paper first reviews recent trends in import duty and para-tariffs in Sri Lanka, particularly after the global financial crisis. An economy-wide computable general equilibrium (CGE) model was then used to evaluate the effects of trade policy reversal on the Sri Lankan economy. The results of the Sri Lankan case study presented suggest that developing countries will not benefit from trade policy reversal at either the macro level or industry level.

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Article provided by Sri Lanka Agricultural Economics Association (SAEA) in its journal Sri Lankan Journal of Agricultural Economics.

Volume (Year): 16 (2014)
Issue (Month): ()

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Handle: RePEc:ags:saeasj:233665
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  1. L. ALAN WINTERS & NEIL McCULLOCH & ANDREW McKAY, 2015. "Trade Liberalization and Poverty: The Evidence So Far," World Scientific Book Chapters,in: Non-Tariff Barriers, Regionalism and Poverty Essays in Applied International Trade Analysis, chapter 14, pages 271-314 World Scientific Publishing Co. Pte. Ltd..
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  7. World Bank, 2012. "World Development Indicators 2012," World Bank Publications, The World Bank, number 6014, January.
  8. Mark Horridge, 2000. "ORANI-G: A General Equilibrium Model of the Australian Economy," Centre of Policy Studies/IMPACT Centre Working Papers op-93, Victoria University, Centre of Policy Studies/IMPACT Centre.
  9. Jayatilleke S. Bandara & Athula Naranpanawa, 2015. "Garment Industry in Sri Lanka and the Removal of GSP Plus by EU," The World Economy, Wiley Blackwell, vol. 38(9), pages 1438-1461, September.
  10. Naranpanawa, Athula & Bandara, Jayatilleke S. & Selvanathan, Saroja, 2011. "Trade and poverty nexus: A case study of Sri Lanka," Journal of Policy Modeling, Elsevier, vol. 33(2), pages 328-346, March.
  11. Bandara, Jayatilleke S, 1991. " Computable General Equilibrium Models for Development Policy Analysis in LDCs," Journal of Economic Surveys, Wiley Blackwell, vol. 5(1), pages 3-69.
  12. World Bank, 2004. "Trade Policies in South Asia : An Overview, Volume 3. Some Key Sectors," World Bank Other Operational Studies 15658, The World Bank.
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  14. J. Mark Horridge & Brian R. Parmenter & Martin Cameron & Riaan Joubert & Areef Suleman & Dawie de Jongh, 1995. "The Macroeconomic, Industrial, Distributional and Regional Effects of Government Spending Programs in South Africa," Centre of Policy Studies/IMPACT Centre Working Papers g-109, Victoria University, Centre of Policy Studies/IMPACT Centre.
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