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Alternative Approaches to Measuring the Cost of Protection

  • Arvind Panagariya

    (University of Maryland)

Economists measure the economy-wide cost of protection in terms of static efficiency, growth rates and firm- or industry-level productivity. The earlier literature was devoted almost exclusively to the measurement of static welfare effects. But the recent proliferation of cross-country regressions has led some economists to focus on the effects of protection on growth rates. Equally, the increased interest in firm- and industry-level regressions has given rise to studies aimed at measuring the effect of protection on firm or industry productivity. A final, albeit less formal, strand of the literature focuses on in- depth case studies of specific countries or sectors. The purpose of this paper is to offer a unified treatment of the literature on the cost of protection with special attention paid to the measurement of these effects.

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Paper provided by EconWPA in its series International Trade with number 0308002.

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Length: 345 pages
Date of creation: 18 Aug 2003
Date of revision:
Handle: RePEc:wpa:wuwpit:0308002
Note: Type of Document - Tex/WordPerfect/Handwritten; prepared on IBM PC - PC-TEX/UNIX Sparc TeX; to print on HP/PostScript/Franciscan monk; pages: 345,395,4323247 ; figures: included/request from author/draw your own
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  1. Ann Harrison, 1995. "Openness and Growth: A Time-Series, Cross-Country Analysis for Developing Countries," NBER Working Papers 5221, National Bureau of Economic Research, Inc.
  2. Pritchett, Lant, 1996. "Measuring outward orientation in LDCs: Can it be done?," Journal of Development Economics, Elsevier, vol. 49(2), pages 307-335, May.
  3. Richard Harris, 1983. "Applied General Equilibrium Analysis of Small Open Economies with Scale Economies and Imperfect Competition," Working Papers 524, Queen's University, Department of Economics.
  4. Douglas A. Irwin, 2001. "The Welfare Cost of Autarky: Evidence from the Jeffersonian Trade Embargo, 1807-1809," NBER Working Papers 8692, National Bureau of Economic Research, Inc.
  5. Chipman, John S, 1970. "External Economies of Scale and Competitive Equilibrium," The Quarterly Journal of Economics, MIT Press, vol. 84(3), pages 347-85, August.
  6. Robin W. Boadway & John M. Treddenick, 1978. "A General Equilibrium Computation of the Effects of the Canadian Tariff Structure," Canadian Journal of Economics, Canadian Economics Association, vol. 11(3), pages 424-46, August.
  7. Harry G. Johnson, 1960. "The Cost of Protection and the Scientific Tariff," Journal of Political Economy, University of Chicago Press, vol. 68, pages 327.
  8. Deardorff, Alan V. & Stern, Robert M., 1981. "A disaggregated model of world production and trade: An estimate of the impact of the Tokyo Round," Journal of Policy Modeling, Elsevier, vol. 3(2), pages 127-152, May.
  9. Sebastian Edwards, 1991. "Trade Orientation, Distortions and Growth in Developing Countries," NBER Working Papers 3716, National Bureau of Economic Research, Inc.
  10. repec:umd:umdeco:rodriguez9901 is not listed on IDEAS
  11. Krugman, Paul R., 1979. "Increasing returns, monopolistic competition, and international trade," Journal of International Economics, Elsevier, vol. 9(4), pages 469-479, November.
  12. Romer, Paul, 1994. "New goods, old theory, and the welfare costs of trade restrictions," Journal of Development Economics, Elsevier, vol. 43(1), pages 5-38, February.
  13. Francisco Rodriguez & Dani Rodrik, 1999. "Trade Policy and Economic Growth: A Skeptic's Guide to Cross-National Evidence," NBER Working Papers 7081, National Bureau of Economic Research, Inc.
  14. Brown, Fred & Whalley, John, 1980. "General Equilibrium Evaluations of Tariff-Cutting Proposals in the Tokyo Round and Comparisons with More Extensive Liberalisation of World Trade," Economic Journal, Royal Economic Society, vol. 90(363), pages 838-66, December.
  15. Jeffrey D. Sachs & Andrew Warner, 1995. "Economic Reform and the Process of Global Integration," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 26(1, 25th A), pages 1-118.
  16. 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.
  17. Jacob Viner, 1929. "The Australian Tariff," The Economic Record, The Economic Society of Australia, vol. 5(2), pages 306-315, November.
  18. W. M. Corden, 1957. "The Calculation Op The Cost Op Protection1," The Economic Record, The Economic Society of Australia, vol. 33(64), pages 29-51, 04.
  19. Martin, John P, 1978. "X-inefficiency, Managerial Effort and Protection," Economica, London School of Economics and Political Science, vol. 45(179), pages 273-86, August.
  20. Robert C. Feenstra, 1992. "How Costly Is Protectionism?," Journal of Economic Perspectives, American Economic Association, vol. 6(3), pages 159-178, Summer.
  21. Krugman, Paul, 1980. "Scale Economies, Product Differentiation, and the Pattern of Trade," American Economic Review, American Economic Association, vol. 70(5), pages 950-59, December.
  22. Ben-David, Dan, 1996. "Trade and convergence among countries," Journal of International Economics, Elsevier, vol. 40(3-4), pages 279-298, May.
  23. Bergsman, Joel, 1974. "Commercial Policy, Allocative Efficiency, and "X-Efficiency."," The Quarterly Journal of Economics, MIT Press, vol. 88(3), pages 409-33, August.
  24. Panagariya, Arvind, 1986. "Increasing returns, dynamic stability, and international trade," Journal of International Economics, Elsevier, vol. 20(1-2), pages 43-63, February.
  25. Bhagwati, Jagdish N, 1982. "Directly Unproductive, Profit-seeking (DUP) Activities," Journal of Political Economy, University of Chicago Press, vol. 90(5), pages 988-1002, October.
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