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Estimating Trade Restrictiveness Indices

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Listed author(s):
  • Kee, Hiau Looi
  • Nicita, Alessandro
  • Olarreaga, Marcelo

Abstract

The objective of this paper is to provide indicators of trade restrictiveness that include both measures of tariff and non-tariff barriers for 91 developing and developed countries. For each country, we estimate three trade restrictiveness indices. The first one captures the extent to which trade policies at home affect domestic welfare. This follows the work of Anderson and Neary (1992, 1994 and 1996). The second index captures the impact of trade distortions on each country’s import bundle. This follows the work of Anderson and Neary (2003). The last index focuses on market access and summarizes the trade distortions imposed by the rest of the world on each country’s export bundle. All indices are estimated for the broad aggregates of manufacturing and agriculture products. Results suggest that poor countries (and those with the highest poverty headcount) tend to be more restrictive, but they also face the highest trade barriers on their export bundle. This is partly explained by the fact that agriculture protection is generally larger than manufacturing protection. NTBs contribute more than 70 percent on average to world protection, underlying their importance for any study on trade protection.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 5576.

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Date of creation: Mar 2006
Handle: RePEc:cpr:ceprdp:5576
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Keywords: trade restrictiveness indices;

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Find related papers by JEL classification:
  • F10 - International Economics - - Trade - - - General
  • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
  • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

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  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. Feenstra, Robert C., 1995. "Estimating the effects of trade policy," Handbook of International Economics,in: G. M. Grossman & K. Rogoff (ed.), Handbook of International Economics, edition 1, volume 3, chapter 30, pages 1553-1595 Elsevier.
  3. Edward E. Leamer, 1986. "Cross Section Estimation of the Effects of Trade Barriers," UCLA Economics Working Papers 417, UCLA Department of Economics.
  4. 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.
  5. Scott Bradford, 2003. "Paying the Price: Final Goods Protection in OECD Countries," The Review of Economics and Statistics, MIT Press, vol. 85(1), pages 24-37, February.
  6. Andriamananjara, Soamiely & Dean, Judith M. & Feinberg, Robert & Ferrantino, Michael J. & Ludema, Rodney & Tsigas, Marinos E., 2004. "The Effects of Non-Tariff Measures on Prices, Trade, and Welfare: CGE Implementation of Policy-Based Price Comparisons," Working Papers 15863, United States International Trade Commission, Office of Economics.
  7. Julio.J. Nogués & Andrzej Olechowski & L. Alan Winters, 2015. "The Extent of Nontariff Barriers to Industrial Countries' Imports," World Scientific Book Chapters,in: Non-Tariff Barriers, Regionalism and Poverty Essays in Applied International Trade Analysis, chapter 2, pages 29-47 World Scientific Publishing Co. Pte. Ltd..
  8. 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, 05.
  9. Harrigan, James, 1997. "Technology, Factor Supplies, and International Specialization: Estimating the Neoclassical Model," American Economic Review, American Economic Association, vol. 87(4), pages 475-494, September.
  10. Anderson, James E & Bannister, Geoffrey J & Neary, J Peter, 1995. "Domestic Distortions and International Trade," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 36(1), pages 139-157, February.
  11. 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.
  12. 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.
  13. Trefler, Daniel, 1993. "Trade Liberalization and the Theory of Endogenous Protection: An Econometric Study of U.S. Import Policy," Journal of Political Economy, University of Chicago Press, vol. 101(1), pages 138-160, February.
  14. 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.
  15. Anderson, James E, 1998. "Trade Restrictiveness Benchmarks," Economic Journal, Royal Economic Society, vol. 108(449), pages 1111-1125, July.
  16. Bernard Hoekman & Francis Ng & Marcelo Olarreaga, 2004. "Agricultural Tariffs or Subsidies: Which Are More Important for Developing Economies?," World Bank Economic Review, World Bank Group, vol. 18(2), pages 175-204.
  17. Jong-Wha Lee & Phillip Swagel, 2000. "Trade Barriers And Trade Flows Across Countries And Industries," The Review of Economics and Statistics, MIT Press, vol. 79(3), pages 372-382, August.
  18. Qing Wang, 2001. "Import-Reducing Effect of Trade Barriers; A Cross-Country Investigation," IMF Working Papers 01/216, International Monetary Fund.
  19. Alan V. Deardorff & Robert M. Stern, 1997. "Measurement of Non-Tariff Barriers," OECD Economics Department Working Papers 179, OECD Publishing.
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