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Effective Protection, Policy Appraisal and Trade Policy Reform

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  • David Greenaway
  • Chris Milner

Abstract

When the effective protection concept was first developed it was widely regarded as a key measure of the structure of protection and became widely deployed. It was however, subject to a theoretical critique on the grounds that it was essentially a partial equilibrium measure, which could not be easily embedded in a general equilibrium framework. Notwithstanding this critique, the concept has continued to be widely used, especially in the context of policy reform and policy appraisal in developing countries. This paper re‐appraises the concept, reviews the extent of its application and discusses the factors behind its longevity as an investigative tool. The paper concludes that the measure still has a role to play in evaluating the structure of protection.

Suggested Citation

  • David Greenaway & Chris Milner, 2003. "Effective Protection, Policy Appraisal and Trade Policy Reform," The World Economy, Wiley Blackwell, vol. 26(4), pages 441-456, April.
    • Handle: RePEc:bla:worlde:v:26:y:2003:i:4:p:441-456
    DOI: 10.1111/1467-9701.00531
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    References listed on IDEAS

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    Cited by:

    1. Kanika Pathania & Aditya Bhattacharjea, 2020. "Inverted Duty Structures and the Paradox of Negative Effective Protection in India, 2000–2014," Foreign Trade Review, , vol. 55(2), pages 139-167, May.
    2. Raffaele Giammetti & Alberto Russo & Mauro Gallegati, 2020. "Key sectors in input–output production networks: An application to Brexit," The World Economy, Wiley Blackwell, vol. 43(4), pages 840-870, April.
    3. Steve McCorriston & Ian Sheldon, 2011. "Tariff (De‐) Escalation with Successive Oligopoly," Review of Development Economics, Wiley Blackwell, vol. 15(4), pages 587-600, November.
    4. Raffaele Giammetti, 2019. "Tariffs, Domestic Import Substitution and Trade Diversion in Input-Output Production Networks: how to deal with Brexit," Mo.Fi.R. Working Papers 152, Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economic and Social Sciences.
    5. Chris Milner, 2013. "Declining Protection in Developing Countries: Fact or Fiction?," The World Economy, Wiley Blackwell, vol. 36(6), pages 689-700, June.
    6. Jozef Konings & Hylke Vandenbussche, 2013. "Antidumping protection hurts exporters: firm-level evidence," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 149(2), pages 295-320, June.
    7. Jože P. Damijan & Boris Majcen, 2003. "Trade Policy in a Small Advanced Transition Economy: Trade Policy Review of Slovenia, 2002," The World Economy, Wiley Blackwell, vol. 26(9), pages 1369-1394, September.
    8. Bo Chen & Hong Ma & David S. Jacks, 2017. "Revisiting the Effective Rate of Protection in the Late Stages of Chinese Industrialisation," The World Economy, Wiley Blackwell, vol. 40(2), pages 424-438, February.
    9. Prema‐chandra Athukorala & Hal Hill & Sisira Jayasuriya, 2021. "Economist as public intellectual: Max Corden’s journey through life," The World Economy, Wiley Blackwell, vol. 44(6), pages 1472-1483, June.
    10. Riandy Laksono & Arianto A. Patunru, 2024. "The dynamics of labor share decline in manufacturing: Evidence from Indonesia," Departmental Working Papers 2024-3, The Australian National University, Arndt-Corden Department of Economics.
    11. Haiou Mao & Holger Görg, 2020. "Friends like this: The impact of the US–China trade war on global value chains," The World Economy, Wiley Blackwell, vol. 43(7), pages 1776-1791, July.
    12. Diakantoni, Antonia & Escaith, Hubert, 2012. "Reassessing effective protection rates in a trade in tasks perspective: Evolution of trade policy in "Factory Asia"," MPRA Paper 41723, University Library of Munich, Germany.
    13. Diakantoni, Antonia & Escaith, Hubert & Roberts, Michael & Verbeet, Thomas, 2017. "Accumulating trade costs and competitiveness in global value chains," WTO Staff Working Papers ERSD-2017-02, World Trade Organization (WTO), Economic Research and Statistics Division.
    14. Kishor Sharma & Oyunbadam Davaakhuu, 2015. "Trade Policymaking in a Resource‐rich Landlocked Country: The WTO Review of Mongolia," The World Economy, Wiley Blackwell, vol. 38(9), pages 1350-1367, September.
    15. Božić, Dragica & Nikolić, Marija M., 2013. "Regional Analysis of Agricultural and Food Trade of Serbia," 135th Seminar, August 28-30, 2013, Belgrade, Serbia 160374, European Association of Agricultural Economists.
    16. Badri Narayanan, G. & Khorana, Sangeetha, 2014. "Tariff escalation, export shares and economy-wide welfare: A computable general equilibrium approach," Economic Modelling, Elsevier, vol. 41(C), pages 109-118.
    17. Maria Cipollina & Luca Salvatici, 2008. "Measuring Protection: Mission Impossible?," Journal of Economic Surveys, Wiley Blackwell, vol. 22(3), pages 577-616, July.
    18. Salamat Ali & Chris Milner, 2016. "Narrow and Broad Perspectives on Trade Policy and Trade Costs: How to Facilitate Trade in Madagascar," The World Economy, Wiley Blackwell, vol. 39(12), pages 1917-1933, December.
    19. Bao Ho Dinh & Hai Nguyen Phuc & Trinh Bui & Hau Nguyen, 2020. "Declining Protection for Vietnamese Agriculture under Trade Liberalization: Evidence from an Input–Output Analysis," Economies, MDPI, vol. 8(2), pages 1-11, June.
    20. Aziz, Ahmed Abdul & Denkyirah, Elisha Kwaku & Denkyirah, Elijah Kofi, 2017. "Effect Of Tariff Escalation On Ghanaian Cocoa Exports: An Empirical Perspective," International Journal of Food and Agricultural Economics (IJFAEC), Alanya Alaaddin Keykubat University, Department of Economics and Finance, vol. 5(01), January.
    21. Prema‐chandra Athukorala, 2006. "Trade Policy Reforms and the Structure of Protection in Vietnam," The World Economy, Wiley Blackwell, vol. 29(2), pages 161-187, February.
    22. repec:wsr:wpaper:y:2017:i:181 is not listed on IDEAS
    23. Etzaz Ahmad & Maha Ahmad & Ghulam Saghir, 2021. "An Analysis of Pakistan’s Agricultural Commodities based on Effective Protection Rate and Its Decomposition," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 60(3), pages 235-249.
    24. Giammetti, Raffaele, 2019. "Tariffs, Domestic Import Substitution and Trade Diversion in Input-Output Production Networks: how to deal with Brexit," MPRA Paper 92835, University Library of Munich, Germany.
    25. Chris Milner, 2004. "Trade Policy in Burundi: Reform Without Political Stability," The World Economy, Wiley Blackwell, vol. 27(9), pages 1363-1376, September.

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