Reinhardt, EricOzden, Caglar2014-08-012014-08-012003-01https://hdl.handle.net/10986/19170Industrial countries maintain special tariff preferences, namely the Generalized System of Preferences (GSP), for imports from developing countries. Critics have highlighted the underachieving nature of such preferences, but developing countries continue to place the GSP at the heart of their agenda in multilateral negotiations. What effect do such preferences have on a recipient's own trade policies? The authors develop and test a simple theoretical model of a small country's trade policy choice, using a dataset of 154 developing countries from 1976 through 2000. They find that countries removed from the GSP adopt more liberal trade policies than those remaining eligible. The results, corrected for endogeneity and robust to numerous alternative measures of trade policy, suggest that developing countries may be best served by full integration into the reciprocity-based world trade regime rather than continued GSP-style special preferences.en-USCC BY 3.0 IGOAGRICULTURAL PRODUCTSANNUAL OBSERVATIONSAVERAGE TARIFFSBARRIERS TO IMPORTSBUSINESS CYCLECARTELCOMPARATIVE ADVANTAGECOMPETITIVE ADVANTAGECONDITIONALITYCONSUMERSCOUNTRY EXPORTERSCOUNTRY IMPORTSCUSTOMSDEVELOPED COUNTRIESDEVELOPMENTDEVELOPMENT POLICIESDOMESTIC DEMANDDOMESTIC FIRMSDOMESTIC MARKETDUTY-FREE ACCESSECONOMETRIC MODELSECONOMIC DEVELOPMENTECONOMIC GROWTHECONOMIC PERFORMANCEEMPIRICAL STUDIESEQUILIBRIUMEXCESS SUPPLYEXPORT EARNINGSEXPORT GOODSEXPORT INDUSTRIESEXPORT MARKETEXPORT PERFORMANCEEXPORT PRICESEXPORT SECTOREXPORT SECTORSEXPORTERSEXPORTSFINANCIAL CRISESFOREIGN MARKETFREE ACCESSFREE TRADEFREER TRADEGDPGENERAL EQUILIBRIUM MODELGENERALIZED SYSTEM OF PREFERENCESGLOBAL TRADEGRAVITY MODELHUMAN RIGHTSIMPORT BARRIERSIMPORT POLICIESIMPORT PRICESIMPORT SUBSTITUTIONIMPORT- COMPETING SECTORIMPORT-COMPETING PRODUCERSIMPORTSINCOMEINCREASING TRADEINDUSTRIALIZATIONINEFFICIENCYINTELLECTUAL PROPERTYINTERNATIONAL INSTITUTIONSINTERNATIONAL TRADELIBERAL TRADE POLICYMARGINAL COSTMARGINAL EFFECTMARKET SIZEMFN TARIFFSMULTILATERAL NEGOTIATIONSMULTILATERAL TRADEMULTILATERAL TRADE NEGOTIATIONSOILOPECPER CAPITA INCOMEPOLITICAL ECONOMYPREFERENCE SCHEMESPREFERENTIAL ACCESSPREFERENTIAL MARKET ACCESSPREFERENTIAL STATUSPRODUCERSPRODUCT LEVELPROTECTION LEVELSPROTECTIONISMPROTECTIONIST POLICIESPROTECTIONIST PRESSURESREAL GDPRECIPROCITYRULES OF ORIGINSTANDARD ERRORSSUNK COSTSTARIFF BARRIERSTARIFF LINESTARIFF PREFERENCESTARIFF PROTECTIONTARIFF RATETARIFF RATESTARIFF REDUCTIONSTARIFF REVENUETERMS OF TRADETRADETRADE BARRIERSTRADE CONCESSIONSTRADE DIVERSIONTRADE EXTERNALITIESTRADE FLOWSTRADE LIBERALIZATIONTRADE LIBERALIZATION EFFORTSTRADE NEGOTIATIONSTRADE OPENNESSTRADE PARTNERSTRADE POLICIESTRADE POLICYTRADE PREFERENCESTRADE PROTECTIONTRADE REGIMETRADE REGIMESTRADE UNITTRADE VOLUMETRADING PARTNERSTRADING REGIMETRANSPORT COSTSUNILATERAL LIBERALIZATIONWORLD ECONOMYWORLD PRICEWORLD PRICESWORLD TRADEWTO10.1596/1813-9450-2955