POLITICAL ECONOMY OF SERVICE TRADE LIBERALIZATION AND THE DOHA ROUND*

K.C. Fung and Alan Siu

Pacific Economic Review, 2008, vol. 13, issue 1, 124-133

Abstract: Abstract. In this paper we examine political economic issues of service trade liberalization of a developing country in the context of the Doha Round negotiations. We first discuss the various unique characteristics of the service industries. Then we incorporate these features in a Grossman‐Helpman style political economy model and solve for the politically‐determined service sector protection. We then examine how various factors such as increased cross‐cutting lobbying, the reduction of state‐owned service providers and linking negotiation on agricultural protection with negotiation on service sector liberalization can help reduce the political constraints on liberalizing the service sectors.

Date: 2008
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