ABSTRACT With their Trade Restrictiveness Index (TRI), Anderson and Neary (1994) introduced the f... more ABSTRACT With their Trade Restrictiveness Index (TRI), Anderson and Neary (1994) introduced the first theoretically satisfying measure of a country's tariff structure, since it aptly overcomes the problem of ad hoc specification of indexing weights. In this short note, I make two points: (1) the TRI is either not defined or ambiguous when countries are large and (2) a more general measure of protection, which explicitly distinguishes among the various motives behind tariffs, namely the need for revenue collection, the potential of improving the terms-of-trade, and the protection of select industries, may resolve this problem.
ABSTRACT With their Trade Restrictiveness Index (TRI), Anderson and Neary (1994) introduced the f... more ABSTRACT With their Trade Restrictiveness Index (TRI), Anderson and Neary (1994) introduced the first theoretically satisfying measure of a country's tariff structure, since it aptly overcomes the problem of ad hoc specification of indexing weights. In this short note, I make two points: (1) the TRI is either not defined or ambiguous when countries are large and (2) a more general measure of protection, which explicitly distinguishes among the various motives behind tariffs, namely the need for revenue collection, the potential of improving the terms-of-trade, and the protection of select industries, may resolve this problem.
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