IDEAS home Printed from https://ideas.repec.org/p/ags/pugtwp/332491.html
   My bibliography  Save this paper

Can reciprocal tariff elimination reduce the welfare losses due to lagging labour productivity?: An analysis of reciprocal preferential trade access between Sub-Saharan Africa and industrialized countries

Author

Listed:
  • Rakotoarisoa, Manitra A.
  • Narayanan G., Badri
  • Khorana, Sangeeta

Abstract

This paper employs General Equilibrium framework modeling and estimates the effects of reciprocal preferential trade liberalization between Sub-Saharan Africa (SSA) and the European Union (EU-25) and all industrialized countries by taking differences in labor productivity into account. We use standard GTAP 7.1 version, with eight aggregated sectors and ten aggregated regions. Simulation results show that prior to reciprocal tariff elimination, when econometric estimates of labor productivity growth are included, SSA loses by USD 12.6 billion annually because of lagging productivity growth, especially in its manufacturing sector. Elimination of tariffs between SSA and all industrialized countries in agriculture and manufacturing sectors improves SSA’s welfare by USD 2 billion, as a result of an increase in endowment and allocative efficiency effects. The gains, however, are not substantial. Results also show that a minimal annual average growth rate of 3 per cent in labor productivity in manufacturing sector will lead to positive allocative and endowment efficiency effects and counter SSA welfare losses.

Suggested Citation

  • Rakotoarisoa, Manitra A. & Narayanan G., Badri & Khorana, Sangeeta, 2014. "Can reciprocal tariff elimination reduce the welfare losses due to lagging labour productivity?: An analysis of reciprocal preferential trade access between Sub-Saharan Africa and industrialized count," Conference papers 332491, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    • Handle: RePEc:ags:pugtwp:332491
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/332491/files/6909.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Geoffrey Heal, 1976. "Do Bad Products Drive Out Good?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 90(3), pages 499-502.
    Full references (including those not matched with items on IDEAS)

    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. Sethi, Rajiv, 1996. "Evolutionary stability and social norms," Journal of Economic Behavior & Organization, Elsevier, vol. 29(1), pages 113-140, January.
    2. Khan, M. Fahim, 1994. "Comparative Economics Of Some Islamic Financing Techniques," Islamic Economic Studies, The Islamic Research and Training Institute (IRTI), vol. 2, pages 35-68.
    3. Erwan Queinnec, 2011. "Do Not-For-Profit Organizations Meet A Demand For Trust Goods ? A Reappraisal Of The Contract Failure Theory [Resoudre Un Probleme D’Asymetrie D’Information En S’Abstenant De Faire Du Profit : Les ," Working Papers hal-01367931, HAL.
    4. Giorgio Coricelli & Luigi Luini, 1999. "Double Moral Hazard: an Experiment on Warranties," CEEL Working Papers 9901, Cognitive and Experimental Economics Laboratory, Department of Economics, University of Trento, Italia.
    5. Roland Kirstein & Annette Kirstein, "undated". "Europäischer Verbraucherschutz – Ausdruck grenzenloser Regulierungswut oder sinnvoller Schutz für Käufer? Erkenntnisse aus einem Laborexperiment," German Working Papers in Law and Economics 2006-1-1160, Berkeley Electronic Press.
    6. Andreas Ortmann, 2001. "Capital Romance: Why Wall Street Fell in Love With Higher Education," Education Economics, Taylor & Francis Journals, vol. 9(3), pages 293-311.
    7. John C. Moorehouse, 2001. "Does Information on the Internet Weaken the Case for Consumer Protection Regulation?," Journal of Private Enterprise, The Association of Private Enterprise Education, vol. 16(Spring 20), pages 138-160.
    8. Belacin, Gisele, 2008. "Disponibilidad a pagar por atributos de calidad. Un estudio aplicado para el caso de la leche fluida," Nülan. Deposited Documents 635, Universidad Nacional de Mar del Plata, Facultad de Ciencias Económicas y Sociales, Centro de Documentación.
    9. Pierre Fleckinger, 2007. "Collective Reputation and Market Structure: Regulating the Quality vs Quantity Trade-of," Working Papers hal-00243080, HAL.
    10. Petra Brhlikova & Andeas Ortmann, 2006. "The Impact of the Non-distribution Constraint and Its Enforcement on Entrepreneurial Choice, Price, and Quality," CERGE-EI Working Papers wp299, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
    11. Otto Keck, 1987. "The Information Dilemma," Journal of Conflict Resolution, Peace Science Society (International), vol. 31(1), pages 139-163, March.
    12. Sanjeev Dewan & Vernon Hsu, 2004. "Adverse Selection In Electronic Markets: Evidence From Online Stamp Auctions," Journal of Industrial Economics, Wiley Blackwell, vol. 52(4), pages 497-516, December.
    13. Tunstall, Allan W., 1990. "Corruption at Flemington Markets? A Case Study in Public Policy," 1990 Conference (34th), February 13-15, 1990, Brisbane, Australia 145426, Australian Agricultural and Resource Economics Society.
    14. Chen, Yong & Mak, Barry & Li, Zhou, 2013. "Quality deterioration in package tours: The interplay of asymmetric information and reputation," Tourism Management, Elsevier, vol. 38(C), pages 43-54.
    15. Andreas Ortmann & Katarína Svítková, 2007. "Certification as a Viable Quality Assurance Mechanism in Transition Economies: Evidence, Theory, and Open Questions," Prague Economic Papers, Prague University of Economics and Business, vol. 2007(2), pages 99-114.
    16. Erwan Queinnec, 2011. "Do Not-For-Profit Organizations Meet A Demand For Trust Goods ? A Reappraisal Of The Contract Failure Theory [Resoudre Un Probleme D’Asymetrie D’Information En S’Abstenant De Faire Du Profit : Les ," CEPN Working Papers hal-01367931, HAL.

    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:ags:pugtwp:332491. 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: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/gtpurus.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.