Policy-induced Barriers Research Articles

Challenges to the Implementation of Regional Integration in ECCAS with Respect to the Free Movement of Persons and Goods.

As part of the community’s goals to develop and promote the culture of human integration, the establishment of ECCAS in 1983 was accompanied by an enabling Protocol (Annex VII, ECCAS Treaty) on free movement of persons and goods within the Central African region, with the vision to fully integrate in years to come. The movement of persons and goods without restriction constitute a major lynchpin towards market integration most especially as People are carriers of goods, consumers’ services, technologies, businesses and knowledge and can effectively tear down policy-induced barriers to trade carrying assets. Despite these benefits and mindful of the spirit enshrined in the aforementioned protocol, the mobility of persons and goods within ECCAS remains a challenging venture. This article, therefore, aims at exposing some fundamental challenges that impede the free circulation of goods and nationals of ECCAS’s Member States within the region. Pooling data largely from secondary sources and through a descriptive approach of data analysis, this study argues that the ECCAS’s protocol on free movement of persons and goods is not effectively implemented due to poor infrastructural and communication links within the region; ethnic divide; political instability; the rise of nationalism; hostile relations; rivalry/enmity between central African heads of state; and regular roadblocks within and across national borders. In this guise, it is categorically imperative for ECCAS’s member states to recognize the fact that the above highlighted challenges constitute an indication to deal with them most especially as free movement of persons and goods represents major pillars upon which integration is based.

Structural Transformation of the Agricultural Sector In Low- and Middle-Income Economies

Movement of labor from agriculture to nonagriculture and the associated increase in farm size through structural transformation are at the core of economic development. We conduct a comprehensive review of the literature exploring the causes and consequences of the transformation. We discuss ( a) the size and determinants for the persisting wage gap between agriculture and nonagriculture, ( b) policy-induced barriers to structural changes, ( c) the role of trade costs and technical change in shaping the nature of structural transformation and comparative advantage of regions, and ( d) how the overall development of an economy affects the relationship between farm size and farm productivity and hence changes competitiveness of different scales of farms. We also identify questions for policy and research and the ways in which new sources and interoperability of data can help answer these questions.

The effect of border barriers to services trade on goods trade

AbstractThis paper has two objectives (a) to introduce border policy‐induced barriers (PIBs) to services trade and (b) analyse the impact of border PIBs in services sectors on goods trade. The World Input‐Output Database covering 43 countries is used over the period 2000–14. A three‐stage analysis is employed. The measures of bilateral services trade barriers calculated in each services sector in the first stage are decomposed into its cultural/geographic and policy‐induced parts in the second stage. Border PIBs to services trade are used in the structural gravity estimations of bilateral goods trade in the final stage. The results demonstrate significant and robust adverse effects of barriers to services trade on goods trade. When the level of development is taken into consideration, there are marked differences in the impact of these barriers on goods trade.

Has China run out of surplus labour?

Abstract Many recent studies claim that China has reached a Lewisian ‘turning point’ in economic development, signalled by rising wages in urban areas and the exhaustion of rural surplus labour. In this paper we show that despite some evidence of rising nominal urban unskilled wages between 2000 and 2009, there is little in the data to suggest that this wage increase has been caused by unskilled labour shortages. China still has abundant under-employed workers with very low income in the rural sector. We argue that China's unique institutional and policy-induced barriers to migration have both prevented many rural workers from migrating to cities and also reduced the migrants' length of stay. We project that under alternative institutional settings, the migrant stock could easily be doubled from the current 150 million to 300 million by increasing either the average length of migrant stay, or the migrant inflow, or both.

Technological Change and the Wealth of Nations

We discuss a unified theory of directed technological change and technology adoption that can shed light on the causes of persistent productivity differences across countries. In our model, new technologies are designed in advanced countries and diffuse endogenously to less developed countries. Our framework is rich enough to highlight three broad reasons for productivity differences: inappropriate technologies, policy-induced barriers to technology adoption, and within-country misallocations across sectors due to policy distortions. We also discuss the effects of two aspects of globalization, trade in goods and migration, on the wealth of nations through their impact on the direction of technical progress. By doing so, we illustrate some of the equalizing and unequalizing forces of globalization.

Technological Change and the Wealth of Nations

We discuss a unified theory of directed technological change and technology adoption that can shed light on the causes of persistent productivity differences across countries. In our model, new technologies are designed in advanced countries and diffuse endogenously to less developed countries. Our framework is rich enough to highlight three broad reasons for productivity differences: inappropriate technologies, policy-induced barriers to technology adoption, and within-country misallocations across sectors due to policy distortions. We also discuss the effects of two aspects of globalization, trade in goods and migration, on the wealth of nations through their impact on the direction of technical progress. By doing so, we illustrate some of the equalizing and unequalizing forces of globalization.

Trade Policy and Economic Growth: A Skeptic's Guide to the Cross-National Evidence

Do countries with lower policy-induced barriers to international trade grow faster, once other relevant country characteristics are controlled for? There exists a large empirical literature providing an affirmative answer to this question. We argue that methodological problems with the empirical strategies employed in this literature leave the results open to diverse interpretations. In many cases, the indicators of openness used by researchers are poor measures of trade barriers or are highly correlated with other sources of bad economic performance. In other cases, the methods used to ascertain the link between trade policy and growth have serious shortcomings. Papers that we review include those by Dollar (1992), Ben-David (1993), Sachs and Warner (1995), Edwards (1998), and Frankel and Romer (1999). We find little evidence that open trade policies-in the sense of lower tariff and nontariff barriers to trade-are significantly associated with economic growth.

Trade Policy and Economic Growth: A Skeptic's Guide to the Cross-National Evidence

Do countries with lower policy-induced barriers to international trade grow faster, once other relevant country characteristics are controlled for? There exists a large empirical literature providing an affirmative answer to this question. We argue that methodological problems with the empirical strategies employed in this literature leave the results open to diverse interpretations. In many cases, the indicators of openness used by researchers are poor measures of trade barriers or are highly correlated with other sources of bad economic performance. In other cases, the methods used to ascertain the link between trade policy and growth have serious shortcomings. Papers that we review include those by Dollar (1992), Ben-David (1993), Sachs and Warner (1995), Edwards (1998), and Frankel and Romer (1999). We find little evidence that open trade policies-in the sense of lower tariff and nontariff barriers to trade-are significantly associated with economic growth.

Trade Policy and Economic Growth: A Skeptic's Guide to the Cross-National Evidence

Do countries with lower policy-induced barriers to international trade grow faster, once other relevant country characteristics are controlled for? There exists a large empirical literature providing an affirmative answer to this question. We argue that methodological problems with the empirical strategies employed in this literature leave the results open to diverse interpretations. In many cases, the indicators of openness used by researchers are poor measures of trade barriers or are highly correlated with other sources of bad economic performance. In other cases, the methods used to ascertain the link between trade policy and growth have serious shortcomings. Papers that we review include those by Dollar (1992), Ben-David (1993), Sachs and Warner (1995), Edwards (1998), and Frankel and Romer (1999). We find little evidence that open trade policies-in the sense of lower tariff and nontariff barriers to trade-are significantly associated with economic growth.

International trade and integration of the European Community: An econometric analysis

The paper contributes to the policy debate on European integration by analyzing intra-Community trade and studying the structural determinants of European competitiveness. Four types of explanatory factors of intra-EC trade are distinguished: (1) factors related to inter-industry trade; (2) factors pertaining to intra-industry trade; (3) factors which reflect natural and policy-induced barriers to trade; and (4) factors reflecting supply constraints. Distinction is drawn between two contrasting factors that favor intra-area trade: those that foster economic welfare and those that hinder a more efficient world division of labor.