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Production-weighted Estimates of Aggregate Protection in Rich Countries Towards Developing Countries

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  • David Roodman

Abstract

A challenge in the development of aggregate indexes of trade protection is weighting individual tariffs in ways that (a) reflect their importance and (b) are not endogenous to the protection being measured. The most obvious basis for weights is actual imports; but these may be highly endogenous. Various authors have worked to correct this endogeneity. For example, in the Bouët et al. (2004 ) 'MAcMap' data set, weights are based on imports of reference groups of countries. But eliminating the endogeneity is difficult in product areas where protection is high and widespread. I develop a new set of estimates of overall protection in rich countries with respect to developing ones that eschews import weights as much as possible in favour of weights based on the value of exporter's total production. The results are generally higher than those of Bouët et al. Product areas in which protection is high and widespread seem systematically de-emphasised when using MAcMap weights, especially in agriculture. I also estimate tariff equivalents of trade-distorting subsidies by country and commodity. Agricultural tariffs dominate subsidies in trade-distorting effect, and agricultural protection in turn dominates goods protection generally. Japan is most protective, largely because of rice tariffs near 900 per cent, followed by Norway and Switzerland. Because of their greater reliance on agriculture, the poorest countries face the highest barriers, despite tariff preferences. Copyright 2007 Center for Global Development Journal compilation Blackwell Publishing .

Suggested Citation

  • David Roodman, 2007. "Production-weighted Estimates of Aggregate Protection in Rich Countries Towards Developing Countries," The World Economy, Wiley Blackwell, vol. 30(6), pages 999-1028, June.
  • Handle: RePEc:bla:worlde:v:30:y:2007:i:6:p:999-1028
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    References listed on IDEAS

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    1. Hiau LooiKee & Alessandro Nicita & Marcelo Olarreaga, 2009. "Estimating Trade Restrictiveness Indices," Economic Journal, Royal Economic Society, vol. 119(534), pages 172-199, January.
    2. William R. Cline, 2004. "Trade Policy and Global Poverty," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 379.
    3. Anderson, James E & Neary, J Peter, 1994. "Measuring the Restrictiveness of Trade Policy," World Bank Economic Review, World Bank Group, vol. 8(2), pages 151-169, May.
    4. William Cline, 2002. "An Index of Industrial Country Trade Policy Toward Developing Countries," Working Papers 14, Center for Global Development.
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    Cited by:

    1. Thomas L. Vollrath & Mark J. Gehlhar & Charles B. Hallahan, 2009. "Bilateral Import Protection, Free Trade Agreements, and Other Factors Influencing Trade Flows in Agriculture and Clothing," Journal of Agricultural Economics, Wiley Blackwell, vol. 60(2), pages 298-317.

    More about this item

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations
    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies

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