Restrictiveness Index as a Measure of Barriers in International Trade in Services

Abstract

The goal of the paper is to develop the method for measuring barriers to trade in services and apply it to determine the degree of restrictiveness of access to the Polish market in selected service industries.In the case of services - more frequently than for tangible goods - barriers take the form of government regulations determining the market entry / establishment of a business or the way of running the business. These regulations may discriminate against foreign entities, or not. This can be checked on the basis of questionnaires or the analysis of government documents (laws, regulations) and industry regulations (e.g. codes of professional ethics). Restrictions are given a numerical value and weight. In this way, restrictiveness index is constructed, measuring access to the service industry. Construction of several such indices for different groups of services allows a comparison of the degree of restrictiveness of foreign access to the Polish market with respect to domestic services and service providers as well as between different industries. This is a base for further studies of the possible results of removing the barriers. The paper reviews the literature on barriers to trade in services and how they are measured. The rationale for using the index of restrictiveness as a measure of barriers in professional services is given and such index is built in other to assess the restrictiveness of the access to market in four sectors of professional services: accountancy, legal, architectural and engineering services.