The Value of Making Commitments Externally: Evidence from WTO Accessions
International Monetary Fund (IMF)
Columbia Business School - Finance and Economics; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR); International Monetary Fund (IMF); Tsinghua University - School of Economics & Management
April 30, 2009
HKIMR Working Paper No.15/2009
This paper studies the value of external commitment to policy reforms in the case of WTO/GATT accessions. The accessions often entail reforms that go beyond narrowly defined trade liberalization, and have to overcome fierce resistance in the acceding countries, as reflected in protracted negotiations. We study the growth and investment consequences of WTO/GATT accessions, with attention to a possible selection bias. We find that the accessions tend to raise income, but only for those countries that were subject to rigorous accession procedures. Policy commitments associated with the accessions were helpful, especially for countries with poor governance.
Number of Pages in PDF File: 36
Keywords: Trade, Growth, Economic Reforms
JEL Classification: F1
Date posted: June 1, 2009
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