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Editor's choice Assessing the Price-Raising Effect of Non-Tariff Measures in Africa

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  • Olivier Cadot
  • Julien Gourdon

Abstract

In spite of widespread tariff reductions, intra-African borders remain ‘thick’. Regional trade is inhibited by inadequate transportation infrastructure but also by various non-tariff measures (NTMs). This paper combines price data from the World Bank's International Comparison Project with a new database on NTMs to estimate their effect on consumer prices for selected consumption products. Results based on panel regressions on 1,260 country-product pairs suggest that, after controlling for tariffs, systematic cross-country cost-of-living differences, and product-specific unobservables, sanitary and phytosanitary measures contribute to raise the price of African foodstuffs by 14%. At the product level, rice and other cereals, some types of meat (e.g. poultry) and edible oils tend to fetch high ad-valorem equivalents. Combining our estimates with data on household expenditure patterns from Kenya's household survey, we show that the effect is regressive, raising the cost of living by 9% for poor households.

Suggested Citation

  • Olivier Cadot & Julien Gourdon, 2014. "Editor's choice Assessing the Price-Raising Effect of Non-Tariff Measures in Africa," Journal of African Economies, Centre for the Study of African Economies, vol. 23(4), pages 425-463.
    • Handle: RePEc:oup:jafrec:v:23:y:2014:i:4:p:425-463.
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    File URL: http://hdl.handle.net/10.1093/jae/eju007
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    Cited by:

    1. Edward J. Balistreri & Zoryana Olekseyuk & David G. Tarr, 2017. "Privatisation and the unusual case of Belarusian accession to the WTO," The World Economy, Wiley Blackwell, vol. 40(12), pages 2564-2591, December.
    2. repec:hal:pseose:hal-00961727 is not listed on IDEAS
    3. John Christopher Beghin & Anne-Célia Disdier & Stéphan Marette, 2017. "Trade restrictiveness indices in the presence of externalities: An application to non-tariff measures," World Scientific Book Chapters, in: John Christopher Beghin (ed.), Nontariff Measures and International Trade, chapter 5, pages 81-104, World Scientific Publishing Co. Pte. Ltd..
    4. Olivier Cadot & Julien Gourdon, 2016. "Non-tariff measures, preferential trade agreements, and prices: new evidence," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 152(2), pages 227-249, May.
    5. Brülhart, Marius, 2014. "More Than Copper: Towards The Diversification And Stabilization Of Zambian Exports," Papers 779, World Trade Institute.
    6. World Bank, 2016. "Assessing the Impact of WTO Accession on Belarus," World Bank Publications - Reports 24698, The World Bank Group.
    7. Edward J. Balistreri & David G. Tarr & Hidemichi Yonezawa, 2015. "Deep Integration in Eastern and Southern Africa: What are the Stakes?," Journal of African Economies, Centre for the Study of African Economies, vol. 24(5), pages 677-706.
    8. Sithanonxay Suvannaphakdy & Hsiao Chink Tang & Alisa DiCaprio, 2016. "Assessing the trade impacts of the ASEAN + 6 FTA for Lao PDR," Asian-Pacific Economic Literature, The Crawford School, The Australian National University, vol. 30(2), pages 72-89, November.
    9. Olivier Cadot & Alan Asprilla & Julien Gourdon & Ralph Peters & Christian Knebel, 2015. "Deep Regional Integration And Non-Tariff Measures: A Methodology For Data Analysis," UNCTAD Blue Series Papers 69, United Nations Conference on Trade and Development.
    10. World Bank, 2015. "Kazakhstan Trade Report," World Bank Publications - Reports 22046, The World Bank Group.
    11. Edward J Balistreri & Maryla Maliszewska & Israel Osorio-Rodarte & David G Tarr & Hidemichi Yonezawa, 2018. "Poverty, Welfare and Income Distribution Implications of Reducing Trade Costs Through Deep Integration in Eastern and Southern Africa," Journal of African Economies, Centre for the Study of African Economies, vol. 27(2), pages 172-200.
    12. Balistreri, Edward J. & Maliszewska, Maryla & Osorio-Rodarte, Israel & Tarr, David G. & Yonezawa, Hidemichi, 2016. "Poverty and Shared Prosperity Implications of Deep Integration in Eastern and Southern Africa," Conference papers 332681, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    13. Alia, Didier Y. & Zheng, Yuqing & Kusunose, Yoko & Reed, Michael R., "undated". "Trade effects of food regulations and standards: Assessing the impact of SPS measures on market structure," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 258368, Agricultural and Applied Economics Association.
    14. Alan Asprilla & Nicolas Berman & Olivier Cadot & Mélise Jaud, 2019. "Trade Policy And Market Power: Firm‐Level Evidence," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 60(4), pages 1647-1673, November.
    15. Edward J. Balistreri & Zoryana Olekseyuk & David G. Tarr, 2017. "Privatisation and the unusual case of Belarusian accession to the WTO," The World Economy, Wiley Blackwell, vol. 40(12), pages 2564-2591, December.
    16. Balistreri, Edward J. & Tarr, David G., 2020. "Comparison of deep integration in the Melitz, Krugman and Armington models: The case of The Philippines in RCEP," Economic Modelling, Elsevier, vol. 85(C), pages 255-271.
    17. Nicolas Berman & Alan Asprilla & Olivier Cadot & Mélise Jaud, 2015. "Pricing-to-market, Trade Policy, and Market Power," IHEID Working Papers 04-2015, Economics Section, The Graduate Institute of International Studies.
    18. Bernard Hoekman & Dominique Njinkeu, 2017. "Integrating Africa: Some Trade Policy Research Priorities and Challenges," RSCAS Working Papers 2017/43, European University Institute.
    19. World Bank Group, 2016. "A Comparative Overview of the Incidence of Non-Tariff Measures on Trade in Lao PDR," World Bank Publications - Reports 24021, The World Bank Group.

    More about this item

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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