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The Value of Making Commitments Externally: Evidence from WTO Accessions

  • Man-Keung Tang
  • Shang-Jin Wei

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 National Bureau of Economic Research, Inc in its series NBER Working Papers with number 14582.

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Date of creation: Dec 2008
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Publication status: published as Tang, Man-Keung & Wei, Shang-Jin, 2009. "The value of making commitments externally: Evidence from WTO accessions," Journal of International Economics, Elsevier, vol. 78(2), pages 216-229, July.
Handle: RePEc:nbr:nberwo:14582
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