[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/p/wbk/wbrwps/5665.html
   My bibliography  Save this paper

Measuring the impacts of global trade reform with optimal aggregators of distortions

Author

Listed:
  • Laborde, David
  • Martin, Will
  • van der Mensbrugghe, Dominique
Abstract
Traditional weighted-average measures of trade distortions are widely used in analyzing global and regional reforms, despite well-known deficiencies. This paper develops and applies optimal aggregators for the real-world case of multiple countries and commodities with much more detailed information on trade than on production and consumption. The approach reflects the fact that different aggregators are needed for expenditure on imported goods and for tariff revenues, and allows for incorporation of both intensive and extensive margins of adjustment to reform. Applications confirm that the technique is straightforward enough for widespread use, and point to close to a doubling of the welfare gains at the intensive margin when using the highest possible level of international commodity disaggregation, with larger gains in developing regions than in the industrial countries. The measured income gains increase along the entire path of liberalization, with slightly larger increases in the earlier stages, where the gaps between the responses of the expenditure and tariff revenue aggregators are largest. Sensitivity analysis suggests that, for global trade reform, the ease of substitution between tariff lines is much more important than that between varieties from different countries.

Suggested Citation

  • Laborde, David & Martin, Will & van der Mensbrugghe, Dominique, 2011. "Measuring the impacts of global trade reform with optimal aggregators of distortions," Policy Research Working Paper Series 5665, The World Bank.
    • Handle: RePEc:wbk:wbrwps:5665
    as

    Download full text from publisher

    File URL: http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2011/05/18/000158349_20110518163857/Rendered/PDF/WPS5665.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Hiau LooiKee & Alessandro Nicita & Marcelo Olarreaga, 2009. "Estimating Trade Restrictiveness Indices," Economic Journal, Royal Economic Society, vol. 119(534), pages 172-199, January.
    2. Douillet, Mathilde, 2011. "Which trade integration scheme can best help Sub-Saharan Africa develop and export more processed agricultural goods?:," IFPRI discussion papers 1119, International Food Policy Research Institute (IFPRI).
    3. Anderson, James E & Neary, J Peter, 1994. "Measuring the Restrictiveness of Trade Policy," The World Bank Economic Review, World Bank, vol. 8(2), pages 151-169, May.
    4. James E. Anderson & J. Peter Neary, 1996. "A New Approach to Evaluating Trade Policy," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 63(1), pages 107-125.
    5. Joseph Francois & Will Martin, 2003. "Formula Approaches for Market Access Negotiations," The World Economy, Wiley Blackwell, vol. 26(1), pages 1-28, January.
    6. James E. Anderson, 2009. "Consistent Trade Policy Aggregation," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 50(3), pages 903-927, August.
    7. Feenstra, Robert C, 1994. "New Product Varieties and the Measurement of International Prices," American Economic Review, American Economic Association, vol. 84(1), pages 157-177, March.
    8. Bach, Christian F. & Martin, Will, 2001. "Would the right tariff aggregator for policy analysis please stand up?," Journal of Policy Modeling, Elsevier, vol. 23(6), pages 621-635, August.
    9. Hiau Looi Kee & Alessandro Nicita & Marcelo Olarreaga, 2008. "Import Demand Elasticities and Trade Distortions," The Review of Economics and Statistics, MIT Press, vol. 90(4), pages 666-682, November.
    10. Manuel A. Hernandez & Raul Ibarra & Danilo R. Trupkin, 2014. "How far do shocks move across borders? Examining volatility transmission in major agricultural futures markets," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 41(2), pages 301-325.
    11. Kohli, Ulrich, 2004. "Real GDP, real domestic income, and terms-of-trade changes," Journal of International Economics, Elsevier, vol. 62(1), pages 83-106, January.
    12. Bernard, Tanguy & Dercon, Stefan & Taffesse, Alemayehu Seyoum, 2011. "Beyond fatalism: An empirical exploration of self-efficacy and aspirations failure in Ethiopia," IFPRI discussion papers 1101, International Food Policy Research Institute (IFPRI).
    13. Chitiga, Margaret & Fofana, Ismael & Mabugu, Ramos, 2011. "A multiregion general equilibrium analysis of fiscal consolidation in South Africa:," IFPRI discussion papers 1110, International Food Policy Research Institute (IFPRI).
    14. James E. Anderson & J. Peter Neary, 2003. "The Mercantilist Index of Trade Policy," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 44(2), pages 627-649, May.
    15. Christian Broda & David E. Weinstein, 2006. "Globalization and the Gains From Variety," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 121(2), pages 541-585.
    16. Chambers,Robert G., 1988. "Applied Production Analysis," Cambridge Books, Cambridge University Press, number 9780521314275, September.
    17. Futoshi Yamauchi & Yanyan Liu & Violy Cordova & Fe Gascon & Juliet Abunyawan & Felisberta Sanchez, 2011. "Impacts of an Early Education Intervention on Students' Learning Achievement," Policy Brief Series, Southeast Asian Regional Center for Graduate Study and Research in Agriculture (SEARCA), vol. 2011.
    18. Gouel, Christophe & Mitaritonna, Cristina & Ramos, Maria Priscila, 2011. "Sensitive products in the Doha negotiations: The case of European and Japanese market access," Economic Modelling, Elsevier, vol. 28(6), pages 2395-2403.
    19. Anderson, James E. & Neary, J. Peter, 2007. "Welfare versus market access: The implications of tariff structure for tariff reform," Journal of International Economics, Elsevier, vol. 71(1), pages 187-205, March.
    20. Kim, Sunny S. & Habicht, Jean-Pierre & Menon, Purnima & Stoltzfus, Rebecca J., 2011. "How do programs work to improve child nutrition?: Program impact pathways of three nongovernmental organization intervention projects in the Peruvian highlands," IFPRI discussion papers 1105, International Food Policy Research Institute (IFPRI).
    21. Torero, Maximo & Viceisza, Angelino C.G., 2016. "Potential collusion and trust: Evidence from a field experiment in Vietnam," African Journal of Agricultural and Resource Economics, African Association of Agricultural Economists, vol. 11(1), pages 1-11.
    22. Timothy J. Kehoe & Kim J. Ruhl, 2013. "How Important Is the New Goods Margin in International Trade?," Journal of Political Economy, University of Chicago Press, vol. 121(2), pages 358-392.
    23. Alexander E. Saak, 2012. "Collective Reputation, Social Norms, and Participation," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 94(3), pages 763-785.
    24. Zhai, Fan, 2008. "Armington Meets Melitz: Introducing Firm Heterogeneity in a Global CGE Model of Trade," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 23, pages 575-604.
    25. Oral Capps Jr. & Sergio Colin‐Castillo & Manuel A. Hernandez, 2013. "Do Marketing Margins Change with Food Scares? Examining the Effects of Food Recalls and Disease Outbreaks in the U.S. Red Meat Industry," Agribusiness, John Wiley & Sons, Ltd., vol. 29(4), pages 426-454, September.
    26. Zhang, Xiaobo & Hu, Dinghuan, 2014. "Overcoming Successive Bottlenecks: The Evolution of a Potato Cluster in China," World Development, Elsevier, vol. 63(C), pages 102-112.
    27. de Brauw, Alan & Gilligan, Daniel, 2011. "Using the regression discontinuity design with implicit partitions: The impacts of comunidades solidarias rurales on schooling in El Salvador," IFPRI discussion papers 1116, International Food Policy Research Institute (IFPRI).
    28. Wiebelt, Manfred & Pauw, Karl & Matovu, John Mary & Twimukye, Evarist & Benson, Todd, 2011. "Managing future oil revenues in Uganda for agricultural development and poverty reduction: A CGE analysis of challenges and options," Kiel Working Papers 1696, Kiel Institute for the World Economy (IfW Kiel).
    29. Kym Anderson & Johanna Croser, 2011. "Novel indicators of the trade and welfare effects of agricultural distortions in OECD countries," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 147(2), pages 269-302, June.
    30. Futoshi Yamauchi & Yanyan Liu, 2013. "Impacts of an Early Stage Education Intervention on Students' Learning Achievement: Evidence from the Philippines," Journal of Development Studies, Taylor & Francis Journals, vol. 49(2), pages 208-222, February.
    31. Spielman, David J. & Kolady, Deepthi E. & Cavalieri, Anthony & Rao, N. Chandrasekhara, 2014. "The seed and agricultural biotechnology industries in India: An analysis of industry structure, competition, and policy options," Food Policy, Elsevier, vol. 45(C), pages 88-100.
    32. Debaere, Peter & Mostashari, Shalah, 2010. "Do tariffs matter for the extensive margin of international trade? An empirical analysis," Journal of International Economics, Elsevier, vol. 81(2), pages 163-169, July.
    33. Nakasone, Eduardo, 2011. "The impact of land titling on labor allocation: Evidence from rural Peru," IFPRI discussion papers 1111, International Food Policy Research Institute (IFPRI).
    34. Futoshi Yamauchi, 2012. "Prenatal Seasonality, Child Growth, and Schooling Investments: Evidence from Rural Indonesia," Journal of Development Studies, Taylor & Francis Journals, vol. 48(9), pages 1323-1341, September.
    35. Prasad, Sanjay K. & Pullabhotla, Hemant & Ganesh-Kumar, A., 2011. "Supply and demand for cereals in Nepal, 2010–2030:," IFPRI discussion papers 1120, International Food Policy Research Institute (IFPRI).
    36. Zambrano, Patricia & Maldonado, Jorge H. & Mendoza, Sandra L. & Ruiz, Lorena & Fonseca, Luz Amparo & Cardona, Iván, 2011. "Women cotton farmers: Their perceptions and experiences with transgenic varieties: A case study for Colombia," IFPRI discussion papers 1118, International Food Policy Research Institute (IFPRI).
    37. Reardon, Thomas & Minten, Bart, 2011. "The quiet revolution in India's food supply chains:," IFPRI discussion papers 1115, International Food Policy Research Institute (IFPRI).
    38. Pullabhotla, Hemant & Ganesh-Kumar, A., 2012. "Review of input and output policies for cereal production in Bangladesh:," IFPRI discussion papers 1199, International Food Policy Research Institute (IFPRI).
    39. Yamauchi, Futoshi & Liu, Yanyan, 2011. "Impacts of an early education intervention on students' learning achievement: Evidence from the Philippines," IFPRI discussion papers 1121, International Food Policy Research Institute (IFPRI).
    40. David Hummels & Peter J. Klenow, 2005. "The Variety and Quality of a Nation's Exports," American Economic Review, American Economic Association, vol. 95(3), pages 704-723, June.
    41. Quisumbing, Agnes R. & Kumar, Neha & Behrman, Julia A., 2011. "Do shocks affect men's and women's assets differently?: A review of literature and new evidence from Bangladesh and Uganda," IFPRI discussion papers 1113, International Food Policy Research Institute (IFPRI).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Morley, Samuel & Piñeiro, Valeria & Robinson, Sherman, 2011. "External shocks and policy alternatives in small open economies: The case of El Salvador," IFPRI discussion papers 1134, International Food Policy Research Institute (IFPRI).
    2. Kym Anderson & Anna Strutt, 2012. "Agriculture and Food Security in Asia by 2030," Macroeconomics Working Papers 23309, East Asian Bureau of Economic Research.
    3. Robert M'barek & Jesus Barreiro-Hurle & Pierre Boulanger & Arnaldo Caivano & Pavel Ciaian & Hasan Dudu & Maria Espinosa Goded & Thomas Fellmann & Emanuele Ferrari & Sergio Gomez Y Paloma & Celso Gorri, 2017. "Scenar 2030 - Pathways for the European agriculture and food sector beyond 2020," JRC Research Reports JRC108449, Joint Research Centre.
    4. Bye, Brita & FæHn, Taran, 2011. "Promoting innovation and imitation in a small open economy: The role of human capital, R&D and trade," Conference papers 332158, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    5. Glendenning, Claire J. & Asenso-Okyere, Kwadwo & Babu, Suresh C., 2011. "Evaluation of value-added agricultural advisory services: Case study of agriclinics in Southern India," IFPRI discussion papers 1125, International Food Policy Research Institute (IFPRI).
    6. Anderson, Kym & Strutt, Anna, 2012. "Growth in Emerging Economies: Implications for Resource-Rich Countries by 2030," Conference papers 332283, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    7. Martin, Will, 2021. "Tools for measuring the full impacts of agricultural interventions," IFPRI-MCC technical papers 2, International Food Policy Research Institute (IFPRI).
    8. Morley, Samuel & Piñeiro, Valeria & Robinson, Sherman, 2011. "A dynamic computable general equilibrium model with working capital for Honduras:," IFPRI discussion papers 1130, International Food Policy Research Institute (IFPRI).
    9. Himics, Mihaly & Listorti, Giulia & Tonini, Axel, 2020. "Simulated economic impacts in applied trade modelling: A comparison of tariff aggregation approaches," Economic Modelling, Elsevier, vol. 87(C), pages 344-357.
    10. Antimiani, Alessandro & Fusacchia, Ilaria & Salvatici, Luca, 2016. "Value Added Trade Restrictiveness Indexes. Measuring Protection with Global Value Chains," Conference papers 332745, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    11. Bouët, Antoine & Laborde Debucquet, David & Traoré, Fousseini, 2017. "The European Union–West Africa Economic Partnership Agreement," IFPRI discussion papers 1612, International Food Policy Research Institute (IFPRI).
    12. Kym Anderson, 2012. "Costing Global Trade Barriers, 1900 to 2050," Departmental Working Papers 2012-08, The Australian National University, Arndt-Corden Department of Economics.
    13. He, Xi & Yang, Anton & Balistreri, Edward J. & Zhang, Wendong, 2021. "Agricultural Trade Impacts of RCEP: an Integrated Partial Equilibrium and General Equilibrium Assessment," Conference papers 333312, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    14. Anderson, Kym & Strutt, Anna, 2012. "Asia?s Growth, the Changing Geography of World Trade, and Food Security: Projections to 2030," CEPR Discussion Papers 8950, C.E.P.R. Discussion Papers.
    15. Yu, Bingxin & Nin-Pratt, Alejandro & Funes, José & Gemessa, Sinafikeh Asrat, 2011. "Cereal production and technology adoption in Ethiopia:," ESSP working papers 31, International Food Policy Research Institute (IFPRI).
    16. van der Mensbrugghe, Dominique, 2013. "Modeling the Global Economy – Forward-Looking Scenarios for Agriculture," Handbook of Computable General Equilibrium Modeling, in: Peter B. Dixon & Dale Jorgenson (ed.), Handbook of Computable General Equilibrium Modeling, edition 1, volume 1, chapter 0, pages 933-994, Elsevier.
    17. Takeshima, Hiroyuki & Salau, Sheu, 2011. "How does ownership of farm implements affect investment in other farm implements when farmers' liquidity constraint is relaxed?: Insights from Nigeria," IFPRI discussion papers 1133, International Food Policy Research Institute (IFPRI).
    18. Anderson, Kym & Strutt, Anna, 2012. "The changing geography of world trade: Projections to 2030," Journal of Asian Economics, Elsevier, vol. 23(4), pages 303-323.
    19. Bernard Hoekman, 2013. "Re-Thinking Economic Development in the WTO," RSCAS Working Papers PP2013/09, European University Institute.
    20. Charness, Gary & Viceisza, Angelino, 2011. "Comprehension and risk elicitation in the field: Evidence from rural Senegal," IFPRI discussion papers 1135, International Food Policy Research Institute (IFPRI).
    21. Himics, Mihály & Britz, Wolfgang, 2016. "Flexible and welfare-consistent tariff aggregation over exporter regions," Economic Modelling, Elsevier, vol. 53(C), pages 375-387.
    22. Ilaria Fusacchia & Alessandro Antimiani & Luca Salvatici, 2021. "An assessment of import tariff costs for Italian exporting firms," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 38(1), pages 31-56, April.
    23. Vanzetti, David & Peters, Ralf, 2013. "Trade and agricultural employment linkages in general equilibrium modelling," 2013 Conference (57th), February 5-8, 2013, Sydney, Australia 152182, Australian Agricultural and Resource Economics Society.
    24. Bernard M. Hoekman, 2013. "Multilateral Institutions and African Economic Integration," RSCAS Working Papers 2013/67, European University Institute.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Yamauchi, Futoshi & Liu, Yanyan, 2011. "Impacts of an early education intervention on students' learning achievement: Evidence from the Philippines," IFPRI discussion papers 1121, International Food Policy Research Institute (IFPRI).
    2. Prasad, Sanjay K. & Pullabhotla, Hemant & Ganesh-Kumar, A., 2011. "Supply and demand for cereals in Nepal, 2010–2030:," IFPRI discussion papers 1120, International Food Policy Research Institute (IFPRI).
    3. Morley, Samuel & Piñeiro, Valeria & Robinson, Sherman, 2011. "A dynamic computable general equilibrium model with working capital for Honduras:," IFPRI discussion papers 1130, International Food Policy Research Institute (IFPRI).
    4. Glendenning, Claire J. & Asenso-Okyere, Kwadwo & Babu, Suresh C., 2011. "Evaluation of value-added agricultural advisory services: Case study of agriclinics in Southern India," IFPRI discussion papers 1125, International Food Policy Research Institute (IFPRI).
    5. Zambrano, Patricia & Maldonado, Jorge H. & Mendoza, Sandra L. & Ruiz, Lorena & Fonseca, Luz Amparo & Cardona, Iván, 2011. "Women cotton farmers: Their perceptions and experiences with transgenic varieties: A case study for Colombia," IFPRI discussion papers 1118, International Food Policy Research Institute (IFPRI).
    6. Cai, Ximing & Yang, Yi-Chen E. & Zhao, Jianshi & Ringler, Claudia, 2011. "Can water allocation in the Yellow River basin be improved?: Insights from a multi-agent system model," IFPRI discussion papers 1117, International Food Policy Research Institute (IFPRI).
    7. de Brauw, Alan & Gilligan, Daniel, 2011. "Using the regression discontinuity design with implicit partitions: The impacts of comunidades solidarias rurales on schooling in El Salvador," IFPRI discussion papers 1116, International Food Policy Research Institute (IFPRI).
    8. Yu, Bingxin & Nin-Pratt, Alejandro & Funes, José & Gemessa, Sinafikeh Asrat, 2011. "Cereal production and technology adoption in Ethiopia:," ESSP working papers 31, International Food Policy Research Institute (IFPRI).
    9. Takeshima, Hiroyuki & Salau, Sheu, 2011. "How does ownership of farm implements affect investment in other farm implements when farmers' liquidity constraint is relaxed?: Insights from Nigeria," IFPRI discussion papers 1133, International Food Policy Research Institute (IFPRI).
    10. Morley, Samuel & Piñeiro, Valeria & Robinson, Sherman, 2011. "External shocks and policy alternatives in small open economies: The case of El Salvador," IFPRI discussion papers 1134, International Food Policy Research Institute (IFPRI).
    11. Chen, Bo & Ma, Hong & Xu, Yuan, 2014. "Measuring China’s trade liberalization: A generalized measure of trade restrictiveness index," Journal of Comparative Economics, Elsevier, vol. 42(4), pages 994-1006.
    12. Maria Cipollina & Luca Salvatici, 2008. "Measuring Protection: Mission Impossible?," Journal of Economic Surveys, Wiley Blackwell, vol. 22(3), pages 577-616, July.
    13. Cletus C. Coughlin, 2010. "Measuring international trade policy: a primer on trade restrictiveness indices," Review, Federal Reserve Bank of St. Louis, vol. 92(Sep), pages 381-394.
    14. Nabeshima, Kaoru & Obashi, Ayako & Kim, Kunhyui, 2021. "Impacts of additional compliance requirements of regulations on the margins of trade," Japan and the World Economy, Elsevier, vol. 59(C).
    15. Anderson, Kym & Martin, Will & van der Mensbrugghe, Dominique, 2013. "Estimating Effects of Price-Distorting Policies Using Alternative Distortions Databases," Handbook of Computable General Equilibrium Modeling, in: Peter B. Dixon & Dale Jorgenson (ed.), Handbook of Computable General Equilibrium Modeling, edition 1, volume 1, chapter 0, pages 877-931, Elsevier.
    16. Atika Benaddi & Peri Silva, 2021. "Trade policy uncertainty: Evidence from the Arab League countries," Review of International Economics, Wiley Blackwell, vol. 29(5), pages 1327-1357, November.
    17. John Christopher Beghin & Anne-Célia Disdier & Stéphan Marette, 2017. "Trade restrictiveness indices in the presence of externalities: An application to non-tariff measures," World Scientific Book Chapters, in: John Christopher Beghin (ed.), Nontariff Measures and International Trade, chapter 5, pages 81-104, World Scientific Publishing Co. Pte. Ltd..
    18. Colantone, Italo & Crinò, Rosario, 2014. "New imported inputs, new domestic products," Journal of International Economics, Elsevier, vol. 92(1), pages 147-165.
    19. Bouët, Antoine & Berisha-Krasniqi, Valdete & Estrades, Carmen & Laborde, David, 2012. "Trade and investment in Latin America and Asia: Perspectives from further integration," Journal of Policy Modeling, Elsevier, vol. 34(2), pages 193-210.
    20. Hiau LooiKee & Alessandro Nicita & Marcelo Olarreaga, 2009. "Estimating Trade Restrictiveness Indices," Economic Journal, Royal Economic Society, vol. 119(534), pages 172-199, January.

    More about this item

    Keywords

    Free Trade; International Trade and Trade Rules; Trade Policy; Economic Theory&Research; Debt Markets;
    All these keywords.

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wbk:wbrwps:5665. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Roula I. Yazigi (email available below). General contact details of provider: https://edirc.repec.org/data/dvewbus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.