Journal Issue: World Bank Economic Review, Volume 16, Issue 1

No Thumbnail Available
Issue Date
Journal Title
Journal ISSN
Journal Volume
Eliminating Excessive Tariffs on Exports of Least Developed Countries
(Washington, DC: World Bank, 2002-01) Hoekman, Bernard ; Ng, Francis ; Olarreaga, Marcelo
Although average Organisation for Economic Co-operation and Development (OECD) tariffs on imports from the least developed countries are very low; tariffs above 15 percent have a disproportional effect on their exports. Products subject to tariff peaks tend to be heavily concentrated in agriculture and food products and labor intensive sectors, such as apparel and footwear. Although the least developed countries benefit from preferential access, preferences tend to be smallest for tariff peak products. A major exception is the European Union, so that the recent European initiative to grant full duty free and quota free access for the least developed countries will result in only a small increase in their exports of tariff peak items. However, as preferences are less significant in other major OECD countries, a more general emulation of the European Union initiative would increase the least developed countries total exports of peak products by US dollar 2.5 billion. Although almost half of this increase is at the expense of other developing country exports, this represents less than 0.05 percent of their total exports. This trade diversion can be avoided by reducing tariff peaks to a uniform 5 percent applied on a nondiscriminatory basis. However, such a reform would imply no gains for the least developed countries, suggesting that the globally welfare superior policy of nondiscriminatory elimination of tariff peaks should be complemented by greater direct assistance to poor countries.
Trade in International Maritime Services : How Much Does Policy Matter?
(Washington, DC: World Bank, 2002-01) Fink, Carsten ; Mattoo, Carsten ; Neagu, Ileana Cristina
Maritime transport costs significantly impede international trade. This article examines why these costs are so high in some countries and quantifies the importance of two explanations: restrictive trade policies and private anticompetitive practices. It finds that both matter, but the latter have a greater impact. Trade liberalization and the breakup of private carrier agreements would lead to an average of one-third lower liner transport prices and to cost savings of up to US dollar 3 billion on goods carried to the United States alone. The policy implications are clear: there is a need not only for further liberalization of government policy but also for strengthened international disciplines on restrictive business practices. The authors propose an approach to developing such disciplines in the current round of services negotiations at the World Trade Organization (WTO).
Trade Policy Options for Chile : Importance of Market Access
(Washington, DC: World Bank, 2002-01) Harrison, Glenn W. ; Rutherford, Thomas F. ; Tarr, David G.
This article uses a multi sector, multi county, computable general equilibrium model to examine Chile's strategy of 'additive regionalism' negotiating bilateral free trade agreements with all of its significant trading partners. Taking Chile regional arrangements bilaterally, only its agreements with Northern partners provide sufficient market access to overcome trade diversion costs. Due to preferential market access, however, additive regionalism is likely to provide Chile with gains that are many multiples of the static welfare gains from unilateral free trade. At least one partner country loses from each of the regional agreements considered, and excluded countries as a group always lose. Gains to the world from global free trade are estimated to be vastly larger than gains from any of the regional arrangements.
Bank Risk and Deposit Insurance
( 2002-01) Laeven, Luc
Arguing that a relatively high cost of deposit insurance indicates that a bank takes excessive risks, this article estimates the cost of deposit insurance for a large sample of banks in 14 economies to assess the relationship between the risk-taking behavior of banks and their corporate governance structure. The results suggest that banks with concentrated ownership tend to take the greatest risks, and those with dispersed ownership engage in a relatively low level of risk taking. Moreover, as a proxy for bank risk, the cost of deposit insurance has some power in predicting bank distress
How Different is the Efficiency of Public and Private Water Companies in Asia?
(Washington, DC: World Bank, 2002-01) Estache, Antonio ; Rossi, Martin A.
Several studies have compared the efficiency of publicly and privately owned water utilities and reached conflicting conclusions on the impact of ownership on efficiency. This article provides further evidence by estimating a stochastic cost frontier for a sample of Asian and Pacific regional water companies. The results show that efficiency is not significantly different in private companies than in public ones.
Imported Machinery for Export Competitiveness
(Washington, DC: World Bank, 2002-01) Mody, Ashoka ; Yilmaz, Kamil
This article analyzes the relationship between export competitiveness and investment in machinery, allowing for imperfect substitution between domestically produced and imported machinery. A trans log export price function is estimated for developed, export oriented developing, and import substituting developing economies in a panel data setting. Between 1967 and 1990 imported machinery helped lower export prices for export oriented developing economies. Moreover, throughout the period imported machinery was not a substitute for domestic machinery. Import substituting developing economies was unable to harness imported machinery to reduce costs early in the period, but from about the early 1980s, with the opening of their trade regimes, they were able to benefit from the cost reducing effect. The results imply that innovative effort based on imported technologies can be a precursor to the development of domestic innovation capabilities.