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Good governance and preferential trade: evidence from the Swiss generalized system of preferences

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  • Christian Ritzel
  • Andreas Kohler
  • Stefan Mann

Abstract

Purpose - The purpose of this paper is to determine if the institutional quality of developing countries (DCs) and least-developed countries (LDCs) contributes to a significant increase in the utilization rate of the Swiss generalized system of preferences in the agro-food sector. Design/methodology/approach - The authors use state of the art regression techniques accounting for zero values to identify if the institutional quality – separately depicted by the Worldwide Governance Indicators, the Index of Economic Freedom and the Human Development Index – can contribute in overcoming non-tariff barriers (NTBs) to trade. Findings - The institutional quality exerts a consistent positive effect on the level of utilization of trade preferences. Research limitations/implications - Swiss food trade represents, of course, only a very small share of world trade, therefore it would be worthwhile to extend the analysis to other countries and sectors. Practical implications - Industrialized countries’ development policies should more strongly focus on capacity building in DCs and LDCs to strengthen trade-related institutions. Originality/value - The study focuses on an often underemphasized element in international trade relations – the role of the institutional quality in overcoming NTBs to trade.

Suggested Citation

  • Christian Ritzel & Andreas Kohler & Stefan Mann, 2018. "Good governance and preferential trade: evidence from the Swiss generalized system of preferences," International Journal of Social Economics, Emerald Group Publishing Limited, vol. 45(2), pages 259-274, February.
    • Handle: RePEc:eme:ijsepp:ijse-11-2016-0331
    DOI: 10.1108/IJSE-11-2016-0331
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    References listed on IDEAS

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