The Dark Side of the Generalized System of Preferences
The Generalized System of Preferences (GSP) was established to promote the exports of low-income countries to industrialized countries in order to support their economic growth and development. However, the design of these schemes is rather complex and the e�ects of GSP have been found to be controversial. While previous studies solely analyzed preferential agreements of individual granting countries separately, implying a one-sided perspective, we take a general view and investigate the overall and dynamic e�ects common to the various GSP schemes in order to provide generalized recommendations for economic policy. In our empirical analysis, based on an extensive dataset covering most of world trade, we �nd that GSP tends to foster developing countries�exports in the short-run, but hampers them in the long-run. Also, GSP granting countries are able to promote their own exports initially, while in the long-run their exports decrease. Economically advanced GSP recipients 1 are more likely to bene�t from GSP than less advanced countries. Taken together, GSP does not seem to be a suitable instrument to promote sustainable economic growth and development of low-income countries.
(This abstract was borrowed from another version of this item.)
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 19 (2011)
Issue (Month): 4 (09)
|Contact details of provider:|| Web page: http://www.blackwellpublishing.com/journal.asp?ref=0965-7576|
|Order Information:||Web: http://www.blackwellpublishing.com/subs.asp?ref=0965-7576|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Michael Tomz & Judith L. Goldstein & Douglas Rivers, 2007. "Do We Really Know That the WTO Increases Trade? Comment," American Economic Review, American Economic Association, vol. 97(5), pages 2005-2018, December.
- Bergstrand, Jeffrey H, 1985. "The Gravity Equation in International Trade: Some Microeconomic Foundations and Empirical Evidence," The Review of Economics and Statistics, MIT Press, vol. 67(3), pages 474-81, August.
- Boriss Siliverstovs & Dieter Schumacher, 2007.
"Estimating Gravity Equations: To Log or Not to Log?,"
Discussion Papers of DIW Berlin
739, DIW Berlin, German Institute for Economic Research.
- Boriss Siliverstovs & Dieter Schumacher, 2009. "Estimating gravity equations: to log or not to log?," Empirical Economics, Springer, vol. 36(3), pages 645-669, June.
- Ozden, Caglar & Reinhardt, Eric, 2003.
"The perversity of preferences : GSP and developing country trade policies, 1976 - 2000,"
Policy Research Working Paper Series
2955, The World Bank.
- Ozden, Caglar & Reinhardt, Eric, 2005. "The perversity of preferences: GSP and developing country trade policies, 1976-2000," Journal of Development Economics, Elsevier, vol. 78(1), pages 1-21, October.
- Grossman, Gene M, 1982. "Import Competition from Developed and Developing Countries," The Review of Economics and Statistics, MIT Press, vol. 64(2), pages 271-81, May.
- Shang-Jin Wei & Arvind Subramanian, 2003.
"The WTO Promotes Trade, Strongly But Unevenly,"
IMF Working Papers
03/185, International Monetary Fund.
- Subramanian, Arvind & Wei, Shang-Jin, 2005. "The WTO Promotes Trade, Strongly But Unevenly," CEPR Discussion Papers 5122, C.E.P.R. Discussion Papers.
- Arvind Subramanian & Shang-Jin Wei, 2003. "The WTO Promotes Trade, Strongly But Unevenly," NBER Working Papers 10024, National Bureau of Economic Research, Inc.
- Daniel Lederman & �Aglar �Zden, 2007.
"Geopolitical Interests And Preferential Access To U.S. Markets,"
Economics and Politics,
Wiley Blackwell, vol. 19(2), pages 235-258, 07.
- Lederman, Daniel & Ozden, Caglar, 2005. "Geopolitical interests and preferential access to U.S. markets," Policy Research Working Paper Series 3531, The World Bank.
- Millimet, Daniel & Henderson, Daniel, 2006.
"Is Gravity Linear?,"
Departmental Working Papers
0517, Southern Methodist University, Department of Economics.
- Lars Nilsson, 2002. "Trading relations: is the roadmap from Lometo Cotonou correct?," Applied Economics, Taylor & Francis Journals, vol. 34(4), pages 439-452.
- Richard Baldwin & Daria Taglioni, 2006.
"Gravity for Dummies and Dummies for Gravity Equations,"
NBER Working Papers
12516, National Bureau of Economic Research, Inc.
- Baldwin, Richard & Taglioni, Daria, 2006. "Gravity for Dummies and Dummies for Gravity Equations," CEPR Discussion Papers 5850, C.E.P.R. Discussion Papers.
- James E. Anderson & Eric van Wincoop, 2003.
"Gravity with Gravitas: A Solution to the Border Puzzle,"
American Economic Review,
American Economic Association, vol. 93(1), pages 170-192, March.
- James E. Anderson & Eric van Wincoop, 2001. "Gravity with Gravitas: A Solution to the Border Puzzle," NBER Working Papers 8079, National Bureau of Economic Research, Inc.
- James E. Anderson & Eric van Wincoop, 2000. "Gravity with Gravitas: A Solution to the Border Puzzle," Boston College Working Papers in Economics 485, Boston College Department of Economics.
- J. M. C. Santos Silva & Silvana Tenreyro, 2006.
"The Log of Gravity,"
The Review of Economics and Statistics,
MIT Press, vol. 88(4), pages 641-658, November.
- Santos Silva, J.M.C & Tenreyro, Silvana, 2005. "The Log of Gravity," CEPR Discussion Papers 5311, C.E.P.R. Discussion Papers.
- Joao Santos Silva & Silvana Tenreyro, 2005. "The Log of Gravity," CEP Discussion Papers dp0701, Centre for Economic Performance, LSE.
- Joao Santos Silva & Silvana Tenreyro, 2005. "The log of gravity," LSE Research Online Documents on Economics 3744, London School of Economics and Political Science, LSE Library.
- Debapriya Bhattacharya & Mustafizur Rahman, 2000. "Regional Cumulation Facility Under Ec-Gsp:Strategic Response From Short And Medium Term Perspectives," CPD Working Paper 9, Centre for Policy Dialogue (CPD).
- Peter Egger, 2002.
"An Econometric View on the Estimation of Gravity Models and the Calculation of Trade Potentials,"
The World Economy,
Wiley Blackwell, vol. 25(2), pages 297-312, 02.
- Peter Egger, . "An Econometric View on the Estimation of Gravity Models and the Calculation of Trade Potentials," WIFO Working Papers 141, WIFO.
- Martínez-Zarzoso, Inmaculada & Nowak-Lehmann D., Felicitas & Vollmer, Sebastian, 2007. "The log of gravity revisited," Center for European, Governance and Economic Development Research Discussion Papers 64, University of Goettingen, Department of Economics.
- Bernhard Herz & Marco Wagner, 2007. "Do the World Trade Organization and the Generalized System of Preferences foster bilateral trade?," Working Papers 020, Bavarian Graduate Program in Economics (BGPE).
- Grossman, Gene M. & Sykes, Alan O., 2005. "A preference for development: the law and economics of GSP," World Trade Review, Cambridge University Press, vol. 4(01), pages 41-67, March.
- Joakim Westerlund & Fredrik Wilhelmsson, 2009. "Estimating the gravity model without gravity using panel data," Applied Economics, Taylor & Francis Journals, vol. 43(6), pages 641-649.
- Persson, Maria & Wilhelmsson, Fredrik, 2006. "Assessing the Effects of EU Trade Preferences for Developing Countries," Working Papers 2006:4, Lund University, Department of Economics, revised 26 Jun 2006.
- Hans P. Lankes & Katerina Alexandraki, 2004. "The Impact of Preference Erosionon Middle-Income Developing Countries," IMF Working Papers 04/169, International Monetary Fund.
When requesting a correction, please mention this item's handle: RePEc:bla:reviec:v:19:y:2011:i:4:p:763-775. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing)or (Christopher F. Baum)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.