Turning Regulation into Data: Digital Trade Restrictiveness Index

We provide estimates of regulatory restrictiveness in digital trade for 152 countries in the year 2022. Using the regulatory information in the Digital Trade Integration (DTI) Database, we assess regulatory trade restrictiveness across 12 pillars that capture regulations and practices affecting trade in ICT goods and digitally deliverable services, comprising 65 indicators. Building on the scores and weights assigned to each entry in the DTI database, we construct a Digital Trade Restrictiveness Index (DTRI) to aggregate the information contained in the 12 pillars into a single country-level measure using a theory-consistent methodology, with each pillar weighted by its estimated impact on digital trade flows. The DTRI can be interpreted as the weighted average level of regulatory restrictiveness across the 12 pillars that would leave digital trade imports unchanged, with higher scores reflecting lower trade integration and higher frictions. The DTRI is negatively correlated with income per capita, governance indicators, and the depth of existing regional trade agreements, and positively correlated with population size. Interestingly, in high-income countries, DTRI is driven by the import restrictiveness of digitally delivered services, and in low-income countries, by the restrictiveness of imports of ICT goods.