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Numbers for Pascal: explaining differences in the estimated benefits of the Doha Development Agenda

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  • Hess, Sebastian
  • Cramon-Taubadel, Stephan von
  • Sperlich, Stefan

Abstract

Economists use partial and general equilibrium trade simulation models to estimate the impact of changes in domestic policies and international trade rules. During the WTO Doha Development Agenda (DDA) negotiations economists have produced many different estimates of the gains that would result from global trade liberalisation scenarios. However, these estimates differ quite widely even for apparently similar liberalisation scenarios. The result is confusion about the true magnitude of the gains from trade liberalisation, and a reduction in the perceived credibility of the theories and models that economists use. We apply meta-analysis to a dataset extracted from 110 studies that present simulated assessments of global trade liberalisation scenarios under the DDA. Initial meta-regression analysis demonstrates that covariates that capture model characteristics, the nature of the data used in the modelling exercise, and the nature of the simulated liberalisation scenarios can explain roughly one-third of the variance in the dependent variable ‘simulated global welfare change’. We test whether additional explanatory power can be obtained by adding information about the authors of the simulation studies. We find significant fixed effects for the top 20 authors in the field. We interpret this as evidence that leading authors in the field employ model specifications that reflect their individual preferences and beliefs about how economies function and the impact of liberalisation, specifications that are hidden in the complex interactions of simulations models and therefore difficult to capture in a meta-analysis. We use these results to generate a confidence interval for the gains that would result from trade liberalisation under the DDA.

Suggested Citation

  • Hess, Sebastian & Cramon-Taubadel, Stephan von & Sperlich, Stefan, 2010. "Numbers for Pascal: explaining differences in the estimated benefits of the Doha Development Agenda," DARE Discussion Papers 1001, Georg-August University of Göttingen, Department of Agricultural Economics and Rural Development (DARE).
  • Handle: RePEc:zbw:daredp:1001
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    References listed on IDEAS

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    1. Thomas W. Hertel & Roman Keeney & Maros Ivanic & L. Alan Winters, 2007. "Distributional effects of WTO agricultural reforms in rich and poor countries," Economic Policy, CEPR;CES;MSH, vol. 22, pages 289-337, April.
    2. Hertel, Thomas W., 1999. "Future Directions in Global Trade Analysis," GTAP Working Papers 298, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
    3. Matthew Adler & Claire Brunel & Gary Clyde Hufbauer & Jeffrey J. Schott, 2009. "What’s on the Table? The Doha Round as of August 2009," Working Paper Series WP09-6, Peterson Institute for International Economics.
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    Cited by:

    1. Bilal, Muhammad & Barkmann, Jan & Jaghdani, Tinoush Jamali, 2017. "To analyse the suitability of a set of soical and economic indicators that assesses the impact on SI enhancing advanced technological inputs by farming households in Punjab Pakistan," DARE Discussion Papers 1708, Georg-August University of Göttingen, Department of Agricultural Economics and Rural Development (DARE).

    More about this item

    Keywords

    Trade Liberalisation; Global Welfare Gain; Applied Trade Model; Meta-Analysis;

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