Trade and International Integration: A Developing Program of Research

Transcription

1 Trade and International Integration: A Developing Program of Research World Bank Development Economics Research Group Geneva, June 2013

2 Three areas of focus I. Implications of the changing patterns of international integration for development II. Designing policy in a changing world III. Identifying priorities and strategies for international cooperation

3 Countries don t export, firms do! The Exporter Dynamics Database covers 45 countries (expansion is underway) 37 Developing countries 8 Developed countries Larger concentration of data in Latin America, Sub-Saharan Africa and Middle East and North Africa

4 Remarkable concentration of exports Exports are concentrated among a very small number of large firms - the top 1 percent (Freund and Pierola, 2012) 100% Share of Top 1% Exporters 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Note: Average for period Should export promotion target SMEs?

5 Exit Rate Entry Rate Turnover of firms in export markets MWI TZA LAO YEM Entry Rate - GDPpc UGA CMR IRN BFA MLI BGD KEN SEN KHM PAK NIC MAR DOM BWA ECU ALB JOR PER MKD BGR GTMSLV CHL MEX COL TUR MUS CRI ZAF EST PRT ESP NZL BEL SWE NOR but so are exporter exit rates EGY BRA Note: Average for period R2= Ln GDPpc MWI YEM Exit Rate - GDPpc In poorer countries, exporter entry rates are high TZA KEN KHM CMR BFA MLI LAO UGA SEN PAK NIC IRN DOM BGR BWA ECU MEX PER CHL MAR MKD ALB JOR COLMUS SLV GTM TUR EGY ZAF CRI BRA Note: Average BGD for period EST PRT ESP NZL BEL SWE R2=-0.36 NOR Ln GDPpc Source: Cebeci, Fernandes, Freund, Pierola (2012)

6 Many firms enter but few survive 70% One-Year Survival Rate of Entrants 60% 50% 40% 30% 20% 10% 0% If there is a case for support, should we assist entry or survival? Note: Average for period

7 Countries don t suffer, people do! Hence: a focus on the impact of trade and trade reform on the individual Sectoral and occupational mobility of workers need to be estimated to forecast distributional effects of trade liberalization. Labor surveys of developing countries can be used to estimate these effects. Household surveys covering 28 countries and 12.million people used to estimate impacts of changes in food trade policies and food prices Counterfactual simulation of wage changes with trade liberalization White collar Service blue collar Production blue collar Agriculture Source: Artuc and McLaren (in progress). Non-Traded Services Manufacturing Traded Services

8 Geographical distribution of migration intensity and positive selection in a. Immigration stock as percentage of the population 2b. Emigration stock as percentage of the population 2c. High-skilled immigration as percentage of total immigration 2d. High-skilled emigration as percentage of total emigration Source: Docquier, Marfouk, Ozden, Parsons (2011)

9 Source: Docquier, Frederic, Caglar Ozden and Giovanni Peri (forthcoming) The Wage Effects of Immigration and Emigration, Results Impact on wages of less educated non-movers

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11 II. Designing policy in a changing world

12 USD Price insulating-protection is still Individual countries try to insulate themselves from changes in world prices of staple foods pervasive in agriculture World rice prices and protection in South East Asia Individually rational, but creates a serious collective action problem 45 percent of the 2008 surge in rice prices was due to export restrictions & import tariff reductions NRA % Poor people vulnerable to high food prices: 100 million people thrown into poverty in Pw SE Asia -40 Source: Martin and Anderson (2010)

13 A new Services Trade Restrictions Database 103 countries (of which 79 developing) (37) (44) (17) (4) (1) No data (105) Borchert/Gootiiz/Mattoo -- Services Trade Restrictions Database 13

14 Global patterns: substantial but uneven liberalization Country-level STRI and per-capita income: ETH ZWE IND IRN QAT DRC BDI PHL EGY IDN NPL BGD VNM JOR TUN MYS OMN BHR KWT CHN THA PAN LBN SAU LKA NAM DZA BWA MWIUGA ZAF BLR VEN TZA YEM RWA MLI KEN LSO CIVCMR NGA PAK CRIMEX UKR URY KHMUZB TUR RUS ITA FRA CHL ZMB HND MAR PRT KORJPN BEL FIN MOZ MDGGHA SEN KGZ PRY GTM ALBBRA AUS DNK CAN COL PERKAZARGHUN BGR MUS CZE GRC NICMNGBOL ROM ESP DEU AUT USA GEO ARM DOM POL LTU GBR SWE TTO NZL NLD IRL ECU Log of GDP per capita Note: GDP per capita 2007, PPP (constant 2005 internat US$) Borchert/Gootiiz/Mattoo -- Services Trade Restrictions Database 14

15 0.5 e( LPI_quality_logistics2009 X ) Services reform as trade facilitation More restrictive transport policies are associated with more expensive and poorer quality logistics services Availability of competitively priced logistics services Partial regression graph LPI_comp_priced2009: IV estimation Quality of logistics services Partial regression graph LPI_quality_logistics2009: IV estimation DRC UZB LAO SWE KGZ AUS IRL PHL MDG MYS RWA KAZ NZL LTU DNKFIN GBR UGA DEU MUS NLD ROM DRC MOZ CZE THA BGR SEN ZAF ETH KEN NIC PAN IND POLARG PRY TZA URY JPN KOR BEL HND GEO ALB LBN PRTCAN FRATUR VEN ECU PAK IDN NGA ITA CRI PER ESP UKR DZA MNG CMR BGD CHL DOM GRC BRA ZMB BOL CIV GHA USA MEX ARM LKA NPL KHM HUN BHR MLI YEM EGY COL NAM RUS GTM BWA AUT JOR TUN VNM CHN KWT IRN OMN QAT SAU e( agi_m0_tra X ) coef = , (robust) se = , t = UZB LAO LBN SWE FIN BEL IRL NLDNK DEU NZL CAN SEN UGAZAF KGZ AUSFRA NICPHL GBR IND HND MDG PRT JPN ITA GTM PAN ESP GEO CRI MOZ ARM NPL POL LTU BGR GHA KORBRA ETH TUR ALB USA URYCHL KEN ARG RWA MEX ECU KAZ DOM PER ROM IDNUKR COL LKANAM MUS GRC VEN Source: Borchert, Gootiiz, Grover and Mattoo (2010) AUT MYS KHM THA PRYMNG CIV CZE TZA YEM MLI JORBHR EGY CMR BOL ZMB HUN NGA PAK BGD DZA BWA RUS TUN VNM KWT IRN CHN OMN e( agi_m0_tra X ) coef = , (robust) se = , t = SAU QAT New work would find better indicators of performance and more rigorous links between policy and performance

16 Services reform as investment promotion More open countries attracted more foreign investment for Adjusted Predictions with 95% CIs over_stri Foreign direct investment (M&A) received in ; predicted values at group-specific means of covariates. Pooled Poisson estimation (93 countries, 8 sectors) with country and sector fixed effects. 16

17 Services reform as industrial policy India s services reform has boosted not only productivity and exports in services, but also the performance of downstream manufacturing industries Percent Gains in Annual TFP Growth After Services Reform New study based on panel data for 4,000 Indian firms for the period finds that 4 3 banking, telecommunications and transport reforms all have significant positive effects on the productivity of manufacturing firms 2 1 New work would help policy-makers understand the implications of alternative sequencing of reforms in goods and services. 0 industries with limited dependence on banking industries with high dependence on banking industries with limited dependence on telecomms industries with high dependence on telecomms Source: Arnold, Javorcik, Lipscomb and Mattoo (2010).

18 Emphasis of trade policy and World Bank assistance to trade is changing Trade Competitiveness: pro-active industrial policies for productive capacity building and export promotion To equip agricultural, manufacturing, and services producers to export Trade Facilitation and Logistics: customs reforms and infrastructure improvements To reduce trade transactions costs and delays World Bank Group Trade Portfolio (WB/IFC commitments FY2008 ) A widely-felt need for more credible evaluation methodologies

19 What can we learn from past evaluations of World Bank trade-related projects? Of the 85 World Bank trade-related projects initiated between 1995 and 2005, only 3/4 were evaluated; most by non-rigorous methods; and less than 5 had a meaningful impact evaluation involving a control group Subjective While the impact on the firms assisted had not yet been determined, a visit to two beneficiaries by a supervision mission confirmed that there had been an impressive impact on the firms' quality of products and skills. Simple before-after comparison The achievement of the overall goal of the project was measured in terms of increases in exports' share of GDP and greater diversification, compared with the initial year of the project.

20 COLLABORATIVE IMPACT EVALUATION: CAN EXPORT PROMOTION ASSISTANCE LEAD TO OVER-DIVERSIFICATION? Preliminary results suggest that Tunisian firms receiving FAMEX assistance are encouraged to introduce new products and sell to new markets with a consequent short-run boost to exports But the boost to exports may not be sustainable The consequences of export assistance provided under FAMEX Exports Products Countries Source: Gourdon, Cadot, Fernandes and Mattoo (2010)

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22 III. Identifying priorities for international cooperation

23 Evaluating Doha What would be lost if Doha is dumped? What can be gained by deconstructing Doha? What lies beyond Doha?

24 Multilateral Cooperation in a Changing World Economy Security a growing concern Agriculture and food security Oil and energy security Globalization/exchange rates and worker security Financial globalization and financial security Climate change and environmental security Multilateral cooperation will be preferable in many cases to unilateral actions but how is it best designed?

25 Impact of Emissions Reductions, Emissions Trading and Transfers on India s Manufacturing Exports on SSA s Manufacturing Exports % change, relative to BAU in Emissions reductions by high income countries are fixed at 30 percent below 2005 levels.

26 Generating a Technological Revolution: Can trade policy play a role? How does the Rest facilitate? What does the West do? Key step: Raise carbon price Carbon price-related actions Progressively eliminate consumer subsidies Commit to commit: For every one dollar increase in carbon price at T, we will raise carbon price by $X by T+Y Trade-related actions Allow limited border tax adjustments Eliminate constraints on green subsidies Technology- Related Actions Contribute to global technology fund Raise protection of IPRs related to green energy and technology

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