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Measuring international trade policy: a primer on trade restrictiveness indices


  • Cletus C. Coughlin


Measuring the overall restrictiveness of a country's international trade policies is important and, in fact, essential for estimating the effects of trade policies and for negotiations to reduce trade barriers. A good measure is also difficult to produce: Trade restrictiveness indices are constructed by combining the actual structure of trade restrictions, which is generally quite different across goods, into a single number. Under certain assumptions, this single number is the uniform tariff that would produce the same trade restrictiveness as the actual differentiated structure of restrictions. In this paper, the economic intuition underlying the construction of these indices is presented and estimates of these indices and the resulting insights are summarized.

Suggested Citation

  • Cletus C. Coughlin, 2010. "Measuring international trade policy: a primer on trade restrictiveness indices," Review, Federal Reserve Bank of St. Louis, issue Sep, pages 381-394.
  • Handle: RePEc:fip:fedlrv:y:2010:i:sep:p:381-394:n:v.92no.5

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    References listed on IDEAS

    1. James E. Anderson & J. Peter Neary, 1996. "A New Approach to Evaluating Trade Policy," Review of Economic Studies, Oxford University Press, vol. 63(1), pages 107-125.
    2. 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.
    3. James E. Anderson & J. Peter Neary, 2003. "The Mercantilist Index of Trade Policy," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 44(2), pages 627-649, May.
    4. Anderson, James E & Neary, J Peter, 1992. "Trade Reform with Quotas, Partial Rent Retention, and Tariffs," Econometrica, Econometric Society, vol. 60(1), pages 57-76, January.
    5. Bach, Christian F. & Martin, Will, 2001. "Would the right tariff aggregator for policy analysis please stand up?," Journal of Policy Modeling, Elsevier, vol. 23(6), pages 621-635, August.
    6. Hiau Looi Kee & Alessandro Nicita & Marcelo Olarreaga, 2008. "Import Demand Elasticities and Trade Distortions," The Review of Economics and Statistics, MIT Press, vol. 90(4), pages 666-682, November.
    7. Anderson, James E. & Neary, J. Peter, 2007. "Welfare versus market access: The implications of tariff structure for tariff reform," Journal of International Economics, Elsevier, vol. 71(1), pages 187-205, March.
    8. Lloyd, Peter J. & Croser, Johanna L. & Anderson, Kym, 2009. "Global Distortions to Agricultural Markets: New Indicators of Trade and Welfare Impacts, 1955 to 2007," 2009 Conference (53rd), February 11-13, 2009, Cairns, Australia 48049, Australian Agricultural and Resource Economics Society.
    9. Anderson, James E, 1998. "Trade Restrictiveness Benchmarks," Economic Journal, Royal Economic Society, vol. 108(449), pages 1111-1125, July.
    10. Vlad Manole & Will Martin, 2016. "Aggregating trade distortions," Economics Bulletin, AccessEcon, vol. 36(1), pages 320-328.
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    Cited by:

    1. Justin O Zake, 2011. "Customs Administration Reform and Modernization in anglophone Africa; Early 1990's to Mid-2010," IMF Working Papers 11/184, International Monetary Fund.
    2. Gheorghe Săvoiu & Vasile Dinu & Laurenţiu Tăchiciu, 2012. "Romania Foreign Trade in Global Recession, Revealed by the Extended Method of Exchange Rate Indicators," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 14(31), pages 173-194, February.
    3. Cletus C. Coughlin, 2012. "Extensive and intensive trade margins: a state-by-state view," Working Papers 2012-002, Federal Reserve Bank of St. Louis.
    4. Coughlin, Cletus C. & Bandyopadhyay, Subhayu, 2014. "Determinants of trade margins: insights using state export data," Working Papers 2014-6, Federal Reserve Bank of St. Louis, revised 18 Nov 2015.
    5. Chen, Bo & Ma, Hong & Xu, Yuan, 2014. "Measuring China’s trade liberalization: A generalized measure of trade restrictiveness index," Journal of Comparative Economics, Elsevier, vol. 42(4), pages 994-1006.

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