Protectionism, how stupid is this? The causal effect of free trade for the world’s poorest countries: Evidence from a quasi-experiment in Switzerland

Christian Ritzel and Andreas Kohler

Journal of Policy Modeling, 2017, vol. 39, issue 6, 1007-1018

Abstract: Against the background of a possible revival of protectionism, we study a quasi-experimental situation in Switzerland to estimate the causal effect of free market access on agro-food exports of least-developed countries. We show that due to this setup our study is not suffering from selection and attrition issues plaguing existing studies. To estimate the causal effect of a unilateral trade liberalization we implement a difference-in-differences model based on synthetic control methods. We find that on average agro-food exports of least-developed countries to Switzerland were about 80% higher due to the introduction of free market access. In other words, if Switzerland had followed the path of protectionism, least-developed countries’ agro-food exports would have been almost half of what they are under free trade.

Keywords: Causal effect; Free trade; Developing countries; Agro-food exports; Preferential trade (search for similar items in EconPapers)
JEL-codes: F1 O1 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jpolmo:v:39:y:2017:i:6:p:1007-1018

DOI: 10.1016/j.jpolmod.2017.05.002

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