Working Paper: NBER ID: w14582
Authors: Mankeung Tang; Shangjin Wei
Abstract: This paper studies the value of external commitment to policy reforms in the case of WTO/GATT accessions. The accessions often entail reforms that go beyond narrowly defined trade liberalization, and have to overcome fierce resistance in the acceding countries, as reflected in protracted negotiations. We study the growth and investment consequences of WTO/GATT accessions, with attention to a possible selection bias. We find that the accessions tend to raise income , but only for those countries that were subject to rigorous accession procedures. Policy commitments associated with the accessions were helpful, especially for countries with poor governance.
Keywords: WTO; GATT; economic growth; policy commitments; governance
JEL Codes: F1; F5; O4
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| WTO/GATT accessions (F13) | increased income (E25) |
| WTO/GATT accessions (F13) | increased investment (E22) |
| WTO/GATT accessions (F13) | faster growth rates (O49) |
| WTO/GATT accessions (F13) | economic performance (P17) |
| extensive reforms (P39) | improved investment climate (O16) |
| external commitments (L14) | promote economic development (O29) |
| external commitments (L14) | substitute for governance (G38) |
| WTO/GATT accessions (F13) | significant economic changes (F69) |
| poor governance (D73) | stronger positive effects of commitments (D91) |