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The Value of Making Commitments Externally: Evidence from WTO Accessions

Author Info

Listed author(s):
  • 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.

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Paper provided by Hong Kong Institute for Monetary Research in its series Working Papers with number 152009.

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Length: 36 pages
Date of creation: Apr 2009
Handle: RePEc:hkm:wpaper:152009
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Keywords: Trade; Growth; Economic Reforms;

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  • F1 - International Economics - - Trade

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