The anti-export bias in commercial policies and export performance : Some evidence from the recent Brazilian experience

Abstract

The literature provides ample empirical evidence of the ill effects of heavy protection on the economic performance of developing countries, but there is little evidence directly linking export behaviour in individual countries with their protection and commercial policies. Yet, if an anti-export bias exists, it is reasonable to infer that changes in it will have an effect on export performance. This paper uses Brazilian data to illustrate this issue. The recent export experience of Brazil is reviewed. A brief model is developed which relates commercial policy to export performance. Part of this model is estimated empirically from pooled Brazilian time series and inter-industry cross-sectional data for the 1970-77 period. The results of the analysis suggest that the anti-export bias does exert an important influence on export supply behaviour in Brazil. Considerable sensitivity in export performance to changes in trade policies, especially import restrictions, is evident. The paper concludes that countries seeking to improve their export performance should evaluate their domestic market protection as well as policies directly related to export incentives.