Policy Barriers to International Trade in Services: Evidence from a New Database

57 Pages Posted: 20 Apr 2016

See all articles by Ingo Borchert

Ingo Borchert

World Bank - Development Research Group (DECRG)

Batshur Gootiiz

World Bank

Aaditya Mattoo

World Bank - Development Research Group (DECRG)

Date Written: June 1, 2012

Abstract

Surprisingly little is known about policies that affect international trade in services. Previous analyses have focused on policy commitments made by countries in international agreements but these commitments do not in many cases reflect actual policy. This paper describes a new initiative to collect comparable information on services trade policies for 103 countries, across a range of service sectors and the relevant modes of service delivery. The resultant database reveals interesting patterns in policy. Across regions, some of the fastest growing countries in Asia and the oil-rich Gulf states have the most restrictive policies in services, whereas some of the poorest countries are remarkably open. Across sectors, professional and transportation services are among the most protected in both industrial and developing countries, while retail, telecommunications and even finance tend to be more open. An illustrative set of results suggests that trade policies matter for investment flows and access to services. In particular, restrictions on foreign acquisitions, discrimination in licensing, restrictions on the repatriation of earnings and lack of legal recourse all have a significant and sizable negative effect, reducing the expected value of sectoral foreign investment by $2.2 billion over a 7-year period, compared with "open" policy regimes. In terms of access to services, credit as a share of gross domestic product is on average 3.3 percentage points lower in countries with major restrictions on the establishment of foreign banks as compared with those that only impose operational restrictions.

Keywords: Transport Economics Policy & Planning, Public Sector Corruption & Anticorruption Measures, Banks & Banking Reform, Emerging Markets, Trade and Services

Suggested Citation

Borchert, Ingo and Gootiiz, Batshur and Mattoo, Aaditya, Policy Barriers to International Trade in Services: Evidence from a New Database (June 1, 2012). World Bank Policy Research Working Paper No. 6109. Available at SSRN: https://ssrn.com/abstract=2096026

Ingo Borchert (Contact Author)

World Bank - Development Research Group (DECRG) ( email )

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Batshur Gootiiz

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

Aaditya Mattoo

World Bank - Development Research Group (DECRG) ( email )

1818 H Street, N.W.
Room MC 3-327
Washington, DC 20433
United States
202-458-8047 (Phone)
202-676-9810 (Fax)

HOME PAGE: http://econ.worldbank.org/staff/amattoo

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