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Background Paper on the IMF's Trade Restrictiveness Index

Author

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  • Krishna, Kala

Abstract

This paper reviews the Funds Trade Restrictiveness Index (IMF-TRI). It has three parts. The �rst part describes what the IMF-TRI is and the data needed to computeit. This part also traces the history of usage and the debate on the use of the IMF-TRI within the fund. It draws on internal Fund documentation as well as interviews conducted by Ms. Tan at IEO and the consultant. It also includes a discussion of the key documents produced internally and commissioned from external sources by the Fund. The second part asks what a good measure should be. There is no one size fits all measure as trade restrictiveness is multi dimensional. However, there is no reason to rely on a single measure of trade restrictiveness to capture all these di-mensions. Depending on how comprehensive a measure is needed, one or a variety of measures may be deemed appropriate to look at. The strengths and weaknesses of the IMF-TRI are highlighted and existing measures briefly surveyed. The third part suggests that an approach based on work by James Anderson, Peter Neary, and Robert Feenstra (ANF-TRI), together with other indicators, be used by the IMF in the future. The approach is relatively flexible and can be used to construct a basic measure of trade restrictiveness or a variety of more comprehensive ones as described in this section. This approach has been implemented by a group of economists at or formerly at the World Bank(H.L. Kee, M. Olarrelanga, A. Nicata). The relevant indices are available online. The averages of some of these indices are being reported in the Global Monitoring Report (GMR) which is put out under the joint auspices of the Bank, Fund, WTO and UNCTAD, and has presumably been vetted by all of the above. This provides additional legitimacy for the Funds use of the index. Moreover, the Bank is committed to updating these indices annually for the GMR.

Suggested Citation

  • Krishna, Kala, 2009. "Background Paper on the IMF's Trade Restrictiveness Index," MPRA Paper 21316, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:21316
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    References listed on IDEAS

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    1. Hiau LooiKee & Alessandro Nicita & Marcelo Olarreaga, 2009. "Estimating Trade Restrictiveness Indices," Economic Journal, Royal Economic Society, vol. 119(534), pages 172-199, January.
    2. Anderson, James E & Neary, J Peter, 1994. "Measuring the Restrictiveness of Trade Policy," The World Bank Economic Review, World Bank, vol. 8(2), pages 151-169, May.
    3. Kala Krishna, 2005. "Understanding Rules of Origin," NBER Working Papers 11150, National Bureau of Economic Research, Inc.
    4. Olivier Cadot & Antoni Estevadeordal & Akiko Suwa-Eisenmann & Thierry Verdier, 2006. "The Origin of Goods: Rules of Origin in Regional Trade Agreements," Post-Print halshs-00754856, HAL.
    5. Hiau Looi Kee & Alessandro Nicita & Marcelo Olarreaga, 2008. "Import Demand Elasticities and Trade Distortions," The Review of Economics and Statistics, MIT Press, vol. 90(4), pages 666-682, November.
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    7. Kala Krishna & Anne Krueger, 1995. "Implementing Free Trade Areas: Rules of Origin and Hidden Protection," NBER Working Papers 4983, National Bureau of Economic Research, Inc.
    8. Anderson, James E, 1998. "Trade Restrictiveness Benchmarks," Economic Journal, Royal Economic Society, vol. 108(449), pages 1111-1125, July.
    9. Pritchett, Lant, 1991. "Measuring outward orientation in developing countries : can it be done?," Policy Research Working Paper Series 566, The World Bank.
    10. James E. Anderson & J. Peter Neary, 2003. "The Mercantilist Index of Trade Policy," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 44(2), pages 627-649, May.
    11. Francisco Rodríguez & Dani Rodrik, 2001. "Trade Policy and Economic Growth: A Skeptic's Guide to the Cross-National Evidence," NBER Chapters, in: NBER Macroeconomics Annual 2000, Volume 15, pages 261-338, National Bureau of Economic Research, Inc.
    12. Cadot, Olivier & Estevadeordal, Antoni & Suwa-Eisenmann, Akiko & Verdier, Thierry (ed.), 2006. "The Origin of Goods: Rules of Origin in Regional Trade Agreements," OUP Catalogue, Oxford University Press, number 9780199290482.
    13. Edwards, Sebastian, 1993. "Openness, Trade Liberalization, and Growth in Developing Countries," Journal of Economic Literature, American Economic Association, vol. 31(3), pages 1358-1393, September.
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    Cited by:

    1. Antimiani, Alessandro & Fusacchia, Ilaria & Salvatici, Luca, 2016. "Value Added Trade Restrictiveness Indexes. Measuring Protection with Global Value Chains," Conference papers 332745, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.

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    Keywords

    IMF; Trade Restrictiveness Index;

    JEL classification:

    • A1 - General Economics and Teaching - - General Economics

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