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The trade restrictiveness index : an application to Mexican agriculture

Author

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  • Anderson, James E.
  • Bannister, Geoffrey

Abstract

Agricultural markets in Mexico, as elsewhere, are distorted by domestic subsidies as well as international trade policies. To measure domestic distortions in agriculture and compare them internationally, analysts have used"producer subsidy equivalent"(a production-share weighted average of producer subsidies) and"consumer subsidy equivalent"indices, as well as the familiar trade-weighted averages of tariffs and tariff equivalents of quotas. All these indices lack a theoretical foundation, as is well-known. Moreover, in the absence of a connection between the three partial indices of consumption, production, and trade distortion, inferences about the trade restrictiveness of all three policies are illegitimate. This paper allies a new concept, the trade restrictiveness index (TRI), to the evaluation of Mexican agricultural reform from 1985 to 1989. It demonstrates the feasibility of the new method and its theoretical and practical advantages over standard techniques, while at the same time providing an assessment of a particularly significant reform episode.

Suggested Citation

  • Anderson, James E. & Bannister, Geoffrey, 1992. "The trade restrictiveness index : an application to Mexican agriculture," Policy Research Working Paper Series 874, The World Bank.
  • Handle: RePEc:wbk:wbrwps:874
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    Citations

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    Cited by:

    1. Jiandong Ju & Kala Krishna, 1997. "Evaluating Trade Reform Using Ex-Post Criteria," NBER Working Papers 6152, National Bureau of Economic Research, Inc.
    2. Johanna L. Croser & Peter J. Lloyd & Kym Anderson, 2010. "How Do Agricultural Policy Restrictions on Global Trade and Welfare Differ Across Commodities?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 92(3), pages 698-712.
    3. Anderson, Kym & Croser, Johanna L. & Lloyd, Peter J, 2009. "Global Distortions to Agricultural Markets: New Indicators of Trade and Welfare Impacts, 1955 to 2007," CEPR Discussion Papers 7160, C.E.P.R. Discussion Papers.
    4. Anderson, James E, 1995. "Tariff-Index Theory," Review of International Economics, Wiley Blackwell, vol. 3(2), pages 156-173, June.
    5. John Baffes, 1998. "Structural reforms and price liberalization in Mexican agriculture," Journal of International Development, John Wiley & Sons, Ltd., vol. 10(5), pages 575-587.
    6. Anderson, James E & Bannister, Geoffrey J & Neary, J Peter, 1995. "Domestic Distortions and International Trade," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 36(1), pages 139-157, February.
    7. Antoine Bou√ęt, 2000. "La mesure des protections commerciales nationales," Working Papers 2000-15, CEPII research center.
    8. Ju, Jiandong & Krishna, Kala, 2000. "Necessary conditions for welfare improving reforms," Economics Letters, Elsevier, vol. 67(2), pages 173-178, May.

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