The Challenge of Reducing Subsidies and Trade Barriers

This is one of 10 studies for the Copenhagen Consensus Project that sought to evaluate the most feasible opportunities to improve welfare globally and alleviate poverty in developing countries. The author argues that phasing out distortionary gover...

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Bibliographic Details
Main Author:	Anderson, Kym
Format:	Policy Research Working Paper
Language:	English en_US
Published:	World Bank, Washington, D.C. 2013
Subjects:	ACCOUNTING AGRICULTURAL PRODUCTION AGRICULTURAL SUBSIDIES AGRICULTURE BALANCE OF PAYMENTS BENCHMARK BILATERAL TRADE CAPITAL GOODS CAPITAL STOCK CLEARANCE CLIMATE CHANGE COAL COMPARATIVE ADVANTAGE CONSTANT RETURNS TO SCALE CONSUMERS CUSTOMS DEVELOPED COUNTRIES DEVELOPING COUNTRIES DIRECT INVESTMENT DUMPING ECONOMIC BENEFITS ECONOMIC COOPERATION ECONOMIC EFFECTS ECONOMIC GEOGRAPHY ECONOMIC GROWTH ECONOMIC RELATIONS ECONOMIC WELFARE ECONOMIES OF SCALE ECONOMISTS EFFICIENT RESOURCE ALLOCATION EMPIRICAL ANALYSIS EMPIRICAL EVIDENCE EMPIRICAL INFORMATION EMPIRICAL STUDIES ENVIRONMENTAL ASSESSMENT ENVIRONMENTAL DEGRADATION ENVIRONMENTAL EFFECTS EQUILIBRIUM EQUIVALENT VARIATION EXPENDITURE EXPERIMENTS EXPORT SUBSIDIES EXPORTS EXTERNALITIES FINANCIAL CRISIS FISCAL POLICIES FISHERIES FOREIGN COMPETITION FOREIGN EXCHANGE FORESTRY FREE TRADE FREE TRADE AREAS GDP GOVERNMENT SUBSIDIES GROWTH RATE HOUSEHOLDS IMPERFECT COMPETITION IMPORTS INCOME INCREASING RETURNS INCREASING RETURNS TO SCALE INTERMEDIATE INPUTS INTERNATIONAL TRADE INVESTMENT FUNDS LAISSEZ FAIRE MINING MONOPOLISTIC COMPETITION MULTILATERAL TRADE MULTILATERAL TRADE NEGOTIATIONS MULTILATERAL TRADE REFORM NATIONAL OUTPUT OPEN ECONOMIES POLICY INSTRUMENT POLICY INSTRUMENTS POLITICAL ECONOMY POLLUTION POVERTY ALLEVIATION PRESENT VALUE PRODUCERS PRODUCT MARKETS PRODUCTIVITY PRODUCTIVITY GROWTH PROPERTY RIGHTS QUOTAS RESOURCE ALLOCATION SAFETY SAFETY NETS SAVINGS SECURE PROPERTY RIGHTS SETTLEMENT SOCIAL COSTS SPILLOVERS STATIC ANALYSIS STOCKS TAX REVENUE TAX REVENUES TAXATION TECHNOLOGICAL CHANGE TECHNOLOGICAL INNOVATION TELECOMMUNICATIONS TERMS OF TRADE TOTAL FACTOR PRODUCTIVITY TRADE AGREEMENTS TRADE BARRIERS TRADE DIVERSION TRADE FACILITATION TRADE LIBERALIZATION TRADE NEGOTIATIONS TRADE POLICIES TRADE POLICY TRADE POLICY REFORM TRADE REFORM TRADE TAXES TRANSACTION COSTS TRANSITION ECONOMIES UNCERTAINTY UNEMPLOYMENT URUGUAY URUGUAY ROUND VALUE ADDED WAGES WEALTH WELFARE EFFECTS WELFARE GAINS WORLD TRADE WORLD TRADE ORGANIZATION WTO
Online Access:	http://documents.worldbank.org/curated/en/2004/09/5175017/challenge-reducing-subsidies-trade-barriers http://hdl.handle.net/10986/14250

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Summary:	This is one of 10 studies for the Copenhagen Consensus Project that sought to evaluate the most feasible opportunities to improve welfare globally and alleviate poverty in developing countries. The author argues that phasing out distortionary government subsidies and barriers to international trade will yield an extraordinarily high benefit-cost ratio. A survey is provided of recent estimates using global economy-wide simulation models of the benefits of doing that by way of the current Doha round of multilateral trade negotiations. Even if adjustment costs are several times as large as suggested by available estimates, the benefit-cost ratio from seizing this opportunity exceeds 20. That is much higher than the rewards from regional or bilateral trade agreements or from providing preferential access for least-developed countries' exports to high-income countries. Such reform would simultaneously contribute to alleviating several of the other key challenges reflected in the United Nation's Millennium Development Goals.

The Challenge of Reducing Subsidies and Trade Barriers

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