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Services policies in transition economies : on the European Union and the World Trade Organization as commitment mechanisms


  • Eschenbach, Felix
  • Hoekman, Bernard


The authors analyze the extent to which the EU-15 and 16 transition economies used the WTO General Agreement on Trade in Services (GATS) to commit to service sector policy reforms. They compare GATS commitments with the evolution of actual policy stances over time. While there is substantial variance across transition economies on both actual policies and GATS commitments, the authors find an inverse relationship between the depth of GATS commitments and the"quality"of actual services policies as assessed by the private sector. In part this can be explained by the fact that the prospect of EU accession makes GATS less relevant as a commitment device for a subset of transition economies. But for many of the non-EU accession candidates, the WTO seems to be a weak commitment device. One explanation is that the small size of the markets concerned generates weak external enforcement incentives. The authors'findings suggest greater collective investment by WTO members in monitoring and the need for transparency to increase the benefits of WTO membership to small countries.

Suggested Citation

  • Eschenbach, Felix & Hoekman, Bernard, 2006. "Services policies in transition economies : on the European Union and the World Trade Organization as commitment mechanisms," Policy Research Working Paper Series 3951, The World Bank.
  • Handle: RePEc:wbk:wbrwps:3951

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    References listed on IDEAS

    1. Rolf J. Langhammer, 2005. "The EU Offer of Service Trade Liberalization in the Doha Round: Evidence of a Not-Yet-Perfect Customs Union," Journal of Common Market Studies, Wiley Blackwell, vol. 43(2), pages 311-325, June.
    2. Kyle Bagwell & Robert W. Staiger, 2004. "The Economics of the World Trading System," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262524341, January.
    3. Eschenbach, Felix & Hoekman, Bernard, 2005. "Services policy reform and economic growth in transition economies, 1990-2004," Policy Research Working Paper Series 3663, The World Bank.
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    Cited by:

    1. Kyle Bagwell & Chad P. Bown & Robert W. Staiger, 2016. "Is the WTO Passé?," Journal of Economic Literature, American Economic Association, vol. 54(4), pages 1125-1231, December.
    2. Adlung, Rudolf, 2009. "Trade in healthcare and health insurance services: The GATS as a supporting actor (?)," WTO Staff Working Papers ERSD-2009-15, World Trade Organization (WTO), Economic Research and Statistics Division.

    More about this item


    Trade and Services; Trade Law; World Trade Organization; Trade and Regional Integration; Free Trade;

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