The GATS and liberalization in a natural-resource rich country

Hatem Samman and Sheikh Shahnawaz

Journal of International Trade & Economic Development, 2007, vol. 16, issue 2, pages 271-292

Abstract: We highlight the role of natural resources in countries that use resource revenues to subsidize employment in state-owned services sectors by developing a model of service provision where domestic incumbents and a foreign entrant compete. We find that when natural resource prices have a higher likelihood of increasing, domestic firms control most of the market share but that industry output drops. However, the output of the services industry rises with domestic firms losing market share when natural resource prices are likely to go down. This suggests that a government focused narrowly only on the growth and development of its economy would prefer services liberalization when natural resource prices are likely to be higher.

Keywords: Services trade; liberalization; natural resources; public enterprise (search for similar items in EconPapers)
Date: 2007

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