IDEAS home Printed from https://ideas.repec.org/a/eee/jpolmo/v39y2017i6p1007-1018.html
   My bibliography  Save this article

Protectionism, how stupid is this? The causal effect of free trade for the world’s poorest countries: Evidence from a quasi-experiment in Switzerland

Author

Listed:
  • Ritzel, Christian
  • Kohler, Andreas

Abstract

Against the background of a possible revival of protectionism, we study a quasi-experimental situation in Switzerland to estimate the causal effect of free market access on agro-food exports of least-developed countries. We show that due to this setup our study is not suffering from selection and attrition issues plaguing existing studies. To estimate the causal effect of a unilateral trade liberalization we implement a difference-in-differences model based on synthetic control methods. We find that on average agro-food exports of least-developed countries to Switzerland were about 80% higher due to the introduction of free market access. In other words, if Switzerland had followed the path of protectionism, least-developed countries’ agro-food exports would have been almost half of what they are under free trade.

Suggested Citation

  • Ritzel, Christian & Kohler, Andreas, 2017. "Protectionism, how stupid is this? The causal effect of free trade for the world’s poorest countries: Evidence from a quasi-experiment in Switzerland," Journal of Policy Modeling, Elsevier, vol. 39(6), pages 1007-1018.
  • Handle: RePEc:eee:jpolmo:v:39:y:2017:i:6:p:1007-1018
    DOI: 10.1016/j.jpolmod.2017.05.002
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0161893817300443
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Winchester, Niven, 2009. "Is there a dirty little secret? Non-tariff barriers and the gains from trade," Journal of Policy Modeling, Elsevier, vol. 31(6), pages 819-834, November.
    2. Jeffrey H. Bergstrand & Scott L. Baier, 2010. "An Evaluation of Swiss Free Trade Agreements Using Matching Econometrics," Aussenwirtschaft, University of St. Gallen, School of Economics and Political Science, Swiss Institute for International Economics and Applied Economics Research, vol. 65(3), pages 239-250, September.
    3. Hertel, Thomas & Hummels, David & Ivanic, Maros & Keeney, Roman, 2007. "How confident can we be of CGE-based assessments of Free Trade Agreements?," Economic Modelling, Elsevier, vol. 24(4), pages 611-635, July.
    4. Charlotte Emlinger & Florence Jacquet & Emmanuelle Chevassus Lozza, 2008. "Tariffs and other trade costs: assessing obstacles to Mediterranean countries' access to EU-15 fruit and vegetable markets," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 35(4), pages 409-438, December.
    5. Baier, Scott L. & Bergstrand, Jeffrey H., 2009. "Estimating the effects of free trade agreements on international trade flows using matching econometrics," Journal of International Economics, Elsevier, vol. 77(1), pages 63-76, February.
    6. Alberto Abadie & Javier Gardeazabal, 2003. "The Economic Costs of Conflict: A Case Study of the Basque Country," American Economic Review, American Economic Association, vol. 93(1), pages 113-132, March.
    7. Nahuis, Richard, 2004. "One size fits all?: Accession to the internal market; an industry-level assessment of EU enlargement," Journal of Policy Modeling, Elsevier, vol. 26(5), pages 571-586, July.
    8. Haddad, Eduardo A. & Domingues, Edson P. & Perobelli, Fernando S., 2002. "Regional effects of economic integration: the case of Brazil," Journal of Policy Modeling, Elsevier, vol. 24(5), pages 453-482, August.
    9. Tarlok Singh, 2010. "Does International Trade Cause Economic Growth? A Survey," The World Economy, Wiley Blackwell, vol. 33(11), pages 1517-1564, November.
    10. Emiliano Magrini & Pierluigi Montalbano & Silvia Nenci, 2013. "Are the EU trade preferences really effective? A Generalized Propensity Score evaluation of the Southern Mediterranean Countries' case in agriculture and fishery," Working Papers 2/13, Sapienza University of Rome, DISS.
    11. Emiliano Magrini & Pierluigi Montalbano & Silvia Nenci, 2013. "Are the EU trade preferences really effective? A Generalized Propensity Score evaluation of the Southern Mediterranean Countries' case in agriculture and fishery," Working Papers 2/13, Sapienza University of Rome, DISS.
    12. Lorand Bartels & Christian Häberli, 2010. "Binding Tariff Preferences for Developing Countries Under Article II Gatt," Journal of International Economic Law, Oxford University Press, vol. 13(4), pages 969-995, December.
    13. A. D. Roy, 1951. "Some Thoughts On The Distribution Of Earnings," Oxford Economic Papers, Oxford University Press, vol. 3(2), pages 135-146.
    14. Baier, Scott L. & Bergstrand, Jeffrey H., 2007. "Do free trade agreements actually increase members' international trade?," Journal of International Economics, Elsevier, vol. 71(1), pages 72-95, March.
    15. Abadie, Alberto & Diamond, Alexis & Hainmueller, Jens, 2010. "Synthetic Control Methods for Comparative Case Studies: Estimating the Effect of California’s Tobacco Control Program," Journal of the American Statistical Association, American Statistical Association, vol. 105(490), pages 493-505.
    16. Erwin Bulte & Gonne Beekman & Salvatore Di Falco & Joseph Hella & Pan Lei, 2014. "Behavioral Responses and the Impact of New Agricultural Technologies: Evidence from a Double-blind Field Experiment in Tanzania," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 96(3), pages 813-830.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Causal effect; Free trade; Developing countries; Agro-food exports; Preferential trade;

    JEL classification:

    • F1 - International Economics - - Trade
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jpolmo:v:39:y:2017:i:6:p:1007-1018. 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: (Dana Niculescu). General contact details of provider: http://www.elsevier.com/locate/inca/505735 .

    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 CitEc recognized a reference but did not link an item in RePEc 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 RePEc Author Service 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.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.