Quantifying the Impact of Services Liberalization in a Developing Country
- Topics:
- GATT,
- Import Export,
- Tariffs
- Tags:
- Developing Country,
- Finance,
- Free Trade,
- Liberalization,
- Service Liberalization,
- University Of Hawaii
- Source:
- University of Hawaii
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Overview: This paper considers how service liberalization differs from that of goods liberalization in terms of welfare, the composition of output, and growth within a developing economy. Trade liberalization reorients production toward sectors of benchmark comparative advantage. It is found that a reduction of services barriers in a way that permits competition through foreign direct investment tends to increase economic activity more evenly across sectors. As a result, service liberalization requires lower adjustment costs, measured in terms of sectoral movement of workers, than does goods trade liberalization. Overall welfare gains of comprehensive service liberalization generally outweigh those available from goods trade liberalization.
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Format: PDF | Size: 236KB | Date: Jun 2002 | Pages: 29
