Barriers for Development of Bangladesh
The Bangladesh Development Studies Vol. XXIX, March-June 2003, Nos.1 & 2
Bangladesh’s Trade Barriers in a Global Perspective: A Comparative Analysis by SELIM RAIHAN ∗
This paper develops an index of trade barrier for 108 countries and makes a comparative analysis of Bangladesh’s trade barrier indices in a global context. Bi-variate as well as multivariate cross-country econometric models have been estimated to explain cross-country variations in trade barrier indices. The results show that cross-country variations in trade barrier indices are much influenced by variations in per capita income, population, the ratio of foreign direct investment to GDP and literacy rate. The findings for a much disaggregated level of commodity categories show that Bangladesh possesses high trade barrier indices. I. INTRODUCTION
How liberalised is the trade regime of Bangladesh in a crosscountry context? The answer to this question is not straightforward as there are many ways of defining trade liberalisation in a crosscountry context. 1 Three types of indicators of trade liberalisation have been used in the economic literature for cross-country comparisons of trade liberalisation. The first type of indicators includes the outcome variables, such as the export-GDP ratio, the import-GDP ratio – or the trade-GDP ratio (exports plus imports as a share in GDP). The second type of indicators includes the policy variables, such as tariffs and non-tariff barriers to trade. Finally, the third type of indicators refers to the indirect measures of trade liberalisation, which include non-trade variables or subjective
∗ 1
The author is an Assistant Professor at the Department of Economics, University of Dhaka. For a list of trade liberalisation indicators in a cross-country context see Appendix 1.
40
The Bangladesh Development Studies
considerations of a country’s trade regime. There is a considerable debate concerning which indicator best explains the extent of trade
Bangladesh’s Trade Barriers in a Global Perspective: A Comparative Analysis by SELIM RAIHAN ∗
This paper develops an index of trade barrier for 108 countries and makes a comparative analysis of Bangladesh’s trade barrier indices in a global context. Bi-variate as well as multivariate cross-country econometric models have been estimated to explain cross-country variations in trade barrier indices. The results show that cross-country variations in trade barrier indices are much influenced by variations in per capita income, population, the ratio of foreign direct investment to GDP and literacy rate. The findings for a much disaggregated level of commodity categories show that Bangladesh possesses high trade barrier indices. I. INTRODUCTION
How liberalised is the trade regime of Bangladesh in a crosscountry context? The answer to this question is not straightforward as there are many ways of defining trade liberalisation in a crosscountry context. 1 Three types of indicators of trade liberalisation have been used in the economic literature for cross-country comparisons of trade liberalisation. The first type of indicators includes the outcome variables, such as the export-GDP ratio, the import-GDP ratio – or the trade-GDP ratio (exports plus imports as a share in GDP). The second type of indicators includes the policy variables, such as tariffs and non-tariff barriers to trade. Finally, the third type of indicators refers to the indirect measures of trade liberalisation, which include non-trade variables or subjective
∗ 1
The author is an Assistant Professor at the Department of Economics, University of Dhaka. For a list of trade liberalisation indicators in a cross-country context see Appendix 1.
40
The Bangladesh Development Studies
considerations of a country’s trade regime. There is a considerable debate concerning which indicator best explains the extent of trade
References: Source: McCulloch et al. (2001).