The welfare implications of services liberalization in a developing country

Nizar Jouini and Nooman Rebei

Journal of Development Economics, 2014, vol. 106, issue C, 1-14

Abstract: We propose an integrated method based on a two-sector small open economy dynamic and stochastic general equilibrium model to estimate non-tariff barriers and quantify the impact of services liberalization. The major component of trade barriers is explicitly modeled through the introduction of entry-sunk costs. Hence, liberalization is treated assuming a government's policy decision aimed at reducing those costs. Then, we estimate the model using Bayesian techniques for Tunisia and the Euro Area. The paper presents a precise quantitative evaluation of services trade barriers as the difference between entry-sunk costs in Tunisia versus the Euro Area. We find significant welfare benefits in addition to aggregate and sectoral growth gains the Tunisian economy could attain following services liberalization. Surprisingly, the good sector is the one that benefits the most from services liberalization in the short- and long-term horizons.

Keywords: Liberalization; Trade in services and goods; General equilibrium; Bayesian estimation; Tunisia (search for similar items in EconPapers)
JEL-codes: E1 F1 F4 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0304387813001156
Full text for ScienceDirect subscribers only

Related works:
Working Paper: The Welfare Implications of Services Liberalization in a Developing Country (2012)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:deveco:v:106:y:2014:i:c:p:1-14

DOI: 10.1016/j.jdeveco.2013.07.016

Access Statistics for this article

Journal of Development Economics is currently edited by M. R. Rosenzweig

More articles in Journal of Development Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().