Journal Issue: World Bank Economic Review, Volume 16, Issue 1
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Volume
16
Number
1
Issue Date
Journal Title
Journal ISSN
1564-698X
Journal
World Bank Economic Review
1564-698X
Journal Volume
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Articles
Eliminating Excessive Tariffs on Exports of Least Developed Countries
(Washington, DC: World Bank, 2002-01) Ng, Francis; Hoekman, Bernard; 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.