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Measuring protection : a cautionary tale

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  • Kevin H. O'Rourke

Abstract

The measurement of protection has been a key stumbling block for economists seeking to establish an empirical link between trade policy and growth. This note comments on a theoretically based index of protection recently developed by Anderson and Neary. The index must be calculated within the context of a specific CGE model; Anderson and Neary have found that the index is robust to changes in the elasticities embedded within their model? The note identifies one historical instance where the index is extremely sensitive to the specification of the model's demand side. There are important methodological lessons to be learnt from this example.

Suggested Citation

  • Kevin H. O'Rourke, 1994. "Measuring protection : a cautionary tale," Working Papers 199423, School of Economics, University College Dublin.
  • Handle: RePEc:ucn:wpaper:199423
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    File URL: http://hdl.handle.net/10197/1765
    File Function: First version, 1994
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    References listed on IDEAS

    as
    1. 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.
    2. Irwin, Douglas A., 1993. "Free Trade and Protection in Nineteenth-Century Britain and France Revisited: A Comment on Nye," The Journal of Economic History, Cambridge University Press, vol. 53(01), pages 146-152, March.
    3. Anderson, James E & Neary, J Peter, 1994. "The Trade Restrictiveness of the Multi-fibre Arrangement," World Bank Economic Review, World Bank Group, pages 171-189.
    4. 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.
    5. Edward E. Leamer, 1988. "Measures of Openness," NBER Chapters,in: Trade Policy Issues and Empirical Analysis, pages 145-204 National Bureau of Economic Research, Inc.
    6. Nye, John Vincent, 1991. "The Myth of Free-Trade Britain and Fortress France: Tariffs and Trade in the Nineteenth Century," The Journal of Economic History, Cambridge University Press, vol. 51(01), pages 23-46, March.
    7. Edwards, Sebastian, 1993. "Openness, Trade Liberalization, and Growth in Developing Countries," Journal of Economic Literature, American Economic Association, pages 1358-1393.
    8. Edwards, Sebastian, 1992. "Trade orientation, distortions and growth in developing countries," Journal of Development Economics, Elsevier, pages 31-57.
    9. Anderson, James E, 1995. "Tariff-Index Theory," Review of International Economics, Wiley Blackwell, pages 156-173.
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    Citations

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    Cited by:

    1. Sami Dakhlia & Akram Temimi, 2006. "An Extension of the Trade Restrictiveness Index to Large Economies," Review of International Economics, Wiley Blackwell, vol. 14(4), pages 678-682, September.
    2. Maria Cipollina & Luca Salvatici, 2008. "Measuring Protection: Mission Impossible?," Journal of Economic Surveys, Wiley Blackwell, pages 577-616.
    3. Krishna, Kala & Ozyildirim, Ataman & Swanson, Norman R., 2003. "Trade, investment and growth: nexus, analysis and prognosis," Journal of Development Economics, Elsevier, pages 479-499.
    4. Benjamin Bridgman, 2013. "Market entry and trade weighted import costs," Canadian Journal of Economics, Canadian Economics Association, vol. 46(3), pages 982-1013, August.
    5. Stéphane BECUWE (GREThA, CNRS, UMR 5113) & Bertrand BLANCHETON (GREThA, CNRS, UMR 5113, 2011. "Tariff growth paradox between 1850 and 1913: a critical survey (In French)," Cahiers du GREThA 2011-24, Groupe de Recherche en Economie Théorique et Appliquée.
    6. 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, May.
    7. Stéphane BECUWE (GREThA, CNRS, UMR 5113) & Bertrand BLANCHETON (GREThA, CNRS, UMR 5113), 2012. "The dispersion of customs tariffs in France between 1850 and 1913: discrimination in trade policy," Cahiers du GREThA 2012-13, Groupe de Recherche en Economie Théorique et Appliquée.
    8. Ju, Jiandong & Krishna, Kala, 2000. "Necessary conditions for welfare improving reforms," Economics Letters, Elsevier, vol. 67(2), pages 173-178, May.
    9. Stéphane BECUWE (GREThA, CNRS, UMR 5113) & Bertrand BLANCHETON (GREThA, CNRS, UMR 5113), 2011. "Tariffs dispersion in France between 1850 and 1913, contribution to tariff growth paradox (In French)," Cahiers du GREThA 2011-21, Groupe de Recherche en Economie Théorique et Appliquée.
    10. Antonio Tena Junguito, 2010. "Tariff History Lessons from the European Periphery. Protection Intensity and the Infant Industry Argument in Spain and Italy 1870-1930," Historical Social Research (Section 'Cliometrics'), Association Française de Cliométrie (AFC), vol. 35(1), pages 340-363.
    11. William J. Collins & Kevin H. O'Rourke & Jeffrey Williamson, 1997. "Were Trade and Factor Mobility Substitutes in History?," NBER Working Papers 6059, National Bureau of Economic Research, Inc.
    12. Krishna, Kala & Ozyildirim, Ataman & Swanson, Norman R., 2003. "Trade, investment and growth: nexus, analysis and prognosis," Journal of Development Economics, Elsevier, pages 479-499.
    13. Douglas A. Irwin, 2007. "Trade Restrictiveness and Deadweight Losses from U.S. Tariffs, 1859-1961," NBER Working Papers 13450, National Bureau of Economic Research, Inc.
    14. Michael A. Clemens & Jeffrey G. Williamson, 2001. "A Tariff-Growth Paradox? Protection's Impact the World Around 1875-1997," NBER Working Papers 8459, National Bureau of Economic Research, Inc.
    15. Sami Dakhlia & John Nye, 2004. "Tax Britannica: Nineteenth Century Tariffs and British National Income," Public Choice, Springer, vol. 121(3), pages 309-333, February.
    16. Jevan Cherniwchan & Eugene Beaulieu, "undated". "Tariff Structure, Trade Expansion and Canadian Protectionism from 1870-1910," Working Papers 2011-08, Department of Economics, University of Calgary, revised 31 Jan 2011.
    17. Tena Junguito, Antonio, 2001. "Measuring protection over time : revenue and protective products in the 19th century European tariff growth debate," IFCS - Working Papers in Economic History.WH wh017204, Universidad Carlos III de Madrid. Instituto Figuerola.
    18. Luca Salvatici, 2001. "Trade Distortion Indexes and Applied General Equilibrium Models: The Case of the Common Agricoltural Policy," Working Papers 45, University of Rome La Sapienza, Department of Public Economics.

    More about this item

    Keywords

    Protection; Trade restrictiviness index; Commercial policy; Protectionism; Economic development;

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • N13 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: Pre-1913

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