Publication: Modeling Services Liberalization : The Case of Kenya
Date
2008-03
ISSN
Published
2008-03
Author(s)
Balistreri, Edward J.
Rutherford, Thomas F.
Tarr, David G.
Abstract
This paper employs a 55 sector small
open economy computable general equilibrium model of the
Kenyan economy to assess the impact of the liberalization of
regulatory barriers against foreign and domestic business
service providers in Kenya. The model incorporates
productivity effects in both goods and services markets
endogenously, through a Dixit-Stiglitz framework. It
estimates the ad valorem equivalent of barriers to foreign
direct investment based on detailed questionnaires completed
by specialists in Kenya. The authors estimate that Kenya
will gain about 11 percent of the value of Kenyan
consumption in the medium run (or about 10 percent of gross
domestic product) from a full reform package that also
includes uniform tariffs. The estimated gains increase to 77
percent of consumption in the long-run steady-state model,
where the impact on the accumulation of capital from an
improvement in the productivity of capital is taken into
account. Decomposition exercises reveal that the largest
gains to Kenya will derive from liberalization of costly
regulatory barriers that are non-discriminatory in their
impacts between Kenyan and multinational service providers.
Citation
“Balistreri, Edward J.; Rutherford, Thomas F.; Tarr, David G.. 2008. Modeling Services Liberalization : The Case of Kenya. Policy Research Working Paper; No. 4544. © World Bank, Washington, DC. http://openknowledge.worldbank.org/entities/publication/db271490-1908-5052-9294-9675ecbe67f6 License: CC BY 3.0 IGO.”
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