Estimating Trade Restrictiveness Indices

39 Pages Posted: 28 Jun 2006

See all articles by Marcelo Olarreaga

Marcelo Olarreaga

University of Geneva; Centre for Economic Policy Research (CEPR)

Hiau Looi Kee

World Bank - Development Research Group (DECRG)

Alessandro Nicita

World Bank - Development Research Group (DECRG)

Multiple version iconThere are 2 versions of this paper

Date Written: March 2006

Abstract

The objective of this paper is to provide indicators of trade restrictiveness that include both measures of tariff and non-tariff barriers for 91 developing and developed countries. For each country, we estimate three trade restrictiveness indices. The first one captures the extent to which trade policies at home affect domestic welfare. This follows the work of Anderson and Neary (1992, 1994 and 1996). The second index captures the impact of trade distortions on each country's import bundle. This follows the work of Anderson and Neary (2003). The last index focuses on market access and summarizes the trade distortions imposed by the rest of the world on each country's export bundle. All indices are estimated for the broad aggregates of manufacturing and agriculture products. Results suggest that poor countries (and those with the highest poverty headcount) tend to be more restrictive, but they also face the highest trade barriers on their export bundle. This is partly explained by the fact that agriculture protection is generally larger than manufacturing protection. NTBs contribute more than 70 percent on average to world protection, underlying their importance for any study on trade protection.

Keywords: Trade restrictiveness indices

JEL Classification: F10, F11, F13

Suggested Citation

Olarreaga, Marcelo and Kee, Hiau Looi and Nicita, Alessandro, Estimating Trade Restrictiveness Indices (March 2006). CEPR Discussion Paper No. 5576, Available at SSRN: https://ssrn.com/abstract=912678

Marcelo Olarreaga (Contact Author)

University of Geneva ( email )

40 Boulevard du Pont-d'Arve
Genève, CH - 1205
Switzerland

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

Hiau Looi Kee

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

1818 H. Street, N.W.
MSN3-311
Washington, DC 20433
United States
202-473-4155 (Phone)
202-522-1159 (Fax)

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

Alessandro Nicita

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

1818 H. Street, N.W.
MSN3-311
Washington, DC 20433
United States
202-473-4066 (Phone)
202-522-1159 (Fax)

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