Click here for search results

Newsletter

Site Tools

Overall Trade Restrictiveness Indices and Import Demand Elasticities (updated June 2012)

Citation: 

Kee, Hiau Looi, Alessandro Nicita and Marcelo Olarreaga. "Estimating trade restrictiveness indices", Economic Journal, 2009, vol. 119, p. 172--199. (pdf file, 326kb)

Kee, Hiau Looi, Alessandro Nicita and Marcelo Olarreaga. "Import Demand Elasticities and Trade Distortions", Review of Economics and Statistics, 2008, vol. 90, no. 4, p. 666—682. (pdf file, 269kb)

Background
 
The Overall Trade Restrictiveness Index (OTRI) summarizes the trade policy stance of a country by calculating the uniform tariff that will keep its overall imports at the current level when the country in fact has different tariffs for different goods. In a nutshell, the OTRI is a more sophisticated way to calculate the weighted average tariff of a given country, with the weights reflect the composition of import volume and import demand elasticities of each imported product. The empirical methodology of the OTRI was first developed in Kee, Nicita and Olarreaga (2008, 2009), based on the theoretical underpinning of Anderson and Neary (1994, 1996, 2003). Irwin (forthcoming) also uses a similar methodology to study the historic protection level of the US, from 1867 to 1961. Recently, Kee, Neagu and Nicita (forthcoming) applied a fixed weight version of OTRI to study protectionism of a wide range of countries during the crisis period.

The OTRI and some other related indices, such as the Trade Restrictiveness Index (TRI) and the Market Access Overall Trade Restrictiveness Index (MAOTRI) are computed annually when new trade flows and tariff data are available. These indices feed into the Global Monitoring Report, an annual World Bank publication joint with the International Monetary Fund. The latest indices and the underlying trade data and elasticity estimates can be download from below. Please cite Kee, Nicita and Olarreaga (2008, 2009) if you are using the elasticity estimates, the OTRI, TRI, MAOTRI or the Ad-Valorem Equivalent of Non-tariff measures of any given country.

References

  • Anderson, James E. and J. Peter Neary (1994), “Measuring the Restrictiveness of Trade Policy,” World Bank Economic Review 8(2), 151--169.
  • Anderson, James and J. Peter Neary (1996), "A new approach to evaluating trade policy," Review of Economic Studies 63 (1), 107-125.
  • Anderson, James and J. Peter Neary (2003), “The Mercantilist index of trade policy,” International Economic Review 44, 627--649.
  • Kee, Hiau Looi, Cristina Neagu and Alessandro Nicita (forthcoming). “Is Protectionism on the Rise? Assessing National Trade Policies during the Crisis of 2008,” The Review of Economics and Statistics  (A previous version of this work, with dataset, has been published as World Bank Policy Research Working Paper 5274 )
  • Irwin, Douglas (forthcoming). “Trade Restrictiveness and Deadweight Losses from U.S. Tariffs.” American Economic Journal: Economic Policy.

Access to Dataset




Permanent URL for this page: http://go.worldbank.org/FG1KHXSP30