Domestic distortions and international trade

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Title: Domestic distortions and international trade
Authors: Anderson, James E.
Neary, J. Peter
Permanent link: http://hdl.handle.net/10197/1688
Date: 15-Dec-1992
Abstract: In this paper, we investigate techniques for measuring the trade policy equivalent of domestic distortions, using a distance function approach. Our measure, the Trade Restrictiveness Index, is shown to equal the uniform tariff which is welfare-equivalent to a given pattern of domestic taxes and subsidies. We extend the Index to incorporate taxes in markets for non-traded goods and factors of production and illustrates its operationality with an application to liberalisation in Mexican agriculture. We conclude that our Index has considerable potential in empirical work and as an aid to trade negotiations.
Funding Details: World Bank
Type of material: Working Paper
Publisher: University College Dublin. School of Economics
Keywords: Trade policy;Domestic distortions;Producer and consumer subsidy equivalents;Trade restrictiveness index
Subject LCSH: Commercial policy
International trade
Language: en
Status of Item: Not peer reviewed
Appears in Collections:Economics Working Papers & Policy Papers

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