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Measuring protection : a cautionary tale

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  • Kevin H. O'Rourke

Abstract

The measurement of protection has been a key stumbling block for economists seeking to establish an empirical link between trade policy and growth. This note comments on a theoretically based index of protection recently developed by Anderson and Neary. The index must be calculated within the context of a specific CGE model; Anderson and Neary have found that the index is robust to changes in the elasticities embedded within their model? The note identifies one historical instance where the index is extremely sensitive to the specification of the model's demand side. There are important methodological lessons to be learnt from this example.

Suggested Citation

  • Kevin H. O'Rourke, 1994. "Measuring protection : a cautionary tale," Working Papers 199423, School of Economics, University College Dublin.
    • Handle: RePEc:ucn:wpaper:199423
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    File URL: http://hdl.handle.net/10197/1765
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    References listed on IDEAS

    as
    1. 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.
    2. Anderson, James E & Neary, J Peter, 1994. "The Trade Restrictiveness of the Multi-fibre Arrangement," The World Bank Economic Review, World Bank, vol. 8(2), pages 171-189, May.
    3. Anderson, James E & Neary, J Peter, 1992. "Trade Reform with Quotas, Partial Rent Retention, and Tariffs," Econometrica, Econometric Society, vol. 60(1), pages 57-76, January.
    4. Edwards, Sebastian, 1993. "Openness, Trade Liberalization, and Growth in Developing Countries," Journal of Economic Literature, American Economic Association, vol. 31(3), pages 1358-1393, September.
    5. Anderson, James E, 1995. "Tariff-Index Theory," Review of International Economics, Wiley Blackwell, vol. 3(2), pages 156-173, June.
    6. Robert E. Baldwin, 1988. "Trade Policy Issues and Empirical Analysis," NBER Books, National Bureau of Economic Research, Inc, number bald88-2.
    7. Edward E. Leamer, 1988. "Measures of Openness," NBER Chapters, in: Trade Policy Issues and Empirical Analysis, pages 145-204, National Bureau of Economic Research, Inc.
    8. Irwin, Douglas A., 1993. "Free Trade and Protection in Nineteenth-Century Britain and France Revisited: A Comment on Nye," The Journal of Economic History, Cambridge University Press, vol. 53(01), pages 146-152, March.
    9. Nye, John Vincent, 1991. "The Myth of Free-Trade Britain and Fortress France: Tariffs and Trade in the Nineteenth Century," The Journal of Economic History, Cambridge University Press, vol. 51(1), pages 23-46, March.
    10. Edwards, Sebastian, 1992. "Trade orientation, distortions and growth in developing countries," Journal of Development Economics, Elsevier, vol. 39(1), pages 31-57, July.
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    Citations

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    Cited by:

    1. Maria Cipollina & Luca Salvatici, 2008. "Measuring Protection: Mission Impossible?," Journal of Economic Surveys, Wiley Blackwell, vol. 22(3), pages 577-616, July.
    2. Benjamin Bridgman, 2013. "Market entry and trade weighted import costs," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 46(3), pages 982-1013, August.
    3. 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.
    4. repec:cte:whrepe:wp06-08 is not listed on IDEAS
    5. Collins, William J & O'Rourke, Kevin Hjortshøj & Williamson, Jeffrey G, 1997. "Were Trade and Factor Mobility Substitutes in History?," CEPR Discussion Papers 1661, C.E.P.R. Discussion Papers.
    6. Sami Dakhlia & Akram Temimi, 2006. "An Extension of the Trade Restrictiveness Index to Large Economies," Review of International Economics, Wiley Blackwell, vol. 14(4), pages 678-682, September.
    7. Sami Dakhlia & John Nye, 2004. "Tax Britannica: Nineteenth Century Tariffs and British National Income," Public Choice, Springer, vol. 121(3), pages 309-333, February.
    8. Luca Salvatici, 2001. "Trade Distortion Indexes and Applied General Equilibrium Models: The Case of the Common Agricoltural Policy," Working Papers in Public Economics 45, University of Rome La Sapienza, Department of Economics and Law.
    9. Stéphane BECUWE & Bertrand BLANCHETON, 2011. "Tariff growth paradox between 1850 and 1913: a critical survey (In French)," Cahiers du GREThA (2007-2019) 2011-24, Groupe de Recherche en Economie Théorique et Appliquée (GREThA).
    10. Stéphane Becuwe & Bertrand Blancheton, 2014. "The dispersion of customs tariffs in France between 1850 and 1913: Discrimination in trade policy," Research in Economic History, in: Research in Economic History, volume 30, pages 163-183, Emerald Group Publishing Limited.
    11. Stéphane BECUWE & Bertrand BLANCHETON, 2011. "Tariffs dispersion in France between 1850 and 1913, contribution to tariff growth paradox (In French)," Cahiers du GREThA (2007-2019) 2011-21, Groupe de Recherche en Economie Théorique et Appliquée (GREThA).
    12. Krishna, Kala & Ozyildirim, Ataman & Swanson, Norman R., 2003. "Trade, investment and growth: nexus, analysis and prognosis," Journal of Development Economics, Elsevier, vol. 70(2), pages 479-499, April.
    13. Jevan Cherniwchan & Eugene Beaulieu, "undated". "Tariff Structure, Trade Expansion and Canadian Protectionism from 1870-1910," Working Papers 2011-08, Department of Economics, University of Calgary, revised 31 Jan 2011.
    14. Ju, Jiandong & Krishna, Kala, 2000. "Necessary conditions for welfare improving reforms," Economics Letters, Elsevier, vol. 67(2), pages 173-178, May.
    15. Douglas A. Irwin, 2007. "Trade Restrictiveness and Deadweight Losses from U.S. Tariffs, 1859-1961," NBER Working Papers 13450, National Bureau of Economic Research, Inc.
    16. Michael A. Clemens & Jeffrey G. Williamson, 2001. "A Tariff-Growth Paradox? Protection's Impact the World Around 1875-1997," NBER Working Papers 8459, National Bureau of Economic Research, Inc.
    17. repec:cte:whrepe:wh017204 is not listed on IDEAS

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    More about this item

    Keywords

    Protection; Trade restrictiviness index; Commercial policy; Protectionism; Economic development;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • N13 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: Pre-1913

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