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The Value of Making Commitments Externally: Evidence from WTO Accessions

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Listed:
  • Man-Keung Tang

    (International Monetary Fund)

  • Shang-Jin Wei

    (Columbia University, NBER)

Abstract

This paper studies the value of external commitment to policy reforms in the case of WTO/GATT accessions. The accessions often entail reforms that go beyond narrowly defined trade liberalization, and have to overcome fierce resistance in the acceding countries, as reflected in protracted negotiations. We study the growth and investment consequences of WTO/GATT accessions, with attention to a possible selection bias. We find that the accessions tend to raise income, but only for those countries that were subject to rigorous accession procedures. Policy commitments associated with the accessions were helpful, especially for countries with poor governance.

Suggested Citation

  • Man-Keung Tang & Shang-Jin Wei, 2009. "The Value of Making Commitments Externally: Evidence from WTO Accessions," Working Papers 152009, Hong Kong Institute for Monetary Research.
    • Handle: RePEc:hkm:wpaper:152009
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    More about this item

    Keywords

    Trade; Growth; Economic Reforms;
    All these keywords.

    JEL classification:

    • F1 - International Economics - - Trade

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