Institutions and Deep Integration

The paper explains why institutions matter for a deep integration process, as illustrated by the liberalization of Non-Tariff Barriers (NTBs) in Europe. We argue that deep trade liberalization requires supranational institutions of deeper integration that permit enforcement, surveillance, and adjudication. To support the claim, we develop a simple model showing why mutual recognition of norms and testing procedures, coupled with a supranational institution can shape the equilibrium level of NTBs in every member state. Member states host special-interest groups that make political contributions to influence their respective government's choice of NTBs. Politicians maximize a realistic welfare function that favours contributions over consumer's social welfare. The supranational institution drains the incentive to lobby for NTBs. The paper discusses the structure of protection that emerges in the equilibrium, stressing how the lobbies' contributions vary with the effectiveness of the supranational institution in reducing NTBs in the final policy outcome. We then use the model to explain the liberalization of NTBs in the EU.economic integration; endogenous protection; International Economics; Trade; European Union;

Patterns of export diversification in developing countries : intensive and extensive margins

This paper uses highly disaggregated trade data to investigate geographic and product diversification patterns across a group of developing nations for the period from 1990 to 2005. The econometric investigation shows that the gravity equation fits the observed differences in diversification across nations. The analysis shows that exports at the intensive margin account for the most important share of overall trade growth. At the extensive margin, geographic diversification is more important than product diversification, especially for developing countries. Taking part in free trade agreements, thereby reducing trade costs, and trading with countries in the North are also found to have positive impacts on export diversification for developing countries.Economic Theory&Research,Free Trade,Trade Policy,Emerging Markets,Achieving Shared Growth

Patterns of export diversification in developing countries: intensive and extensive margins

This paper uses highly disaggregated trade data to investigate geographic and product diversification patterns across a group of developing nations for the period from 1990 to 2005. The econometric investigation shows that the gravity equation fits the observed differences in diversification across nations. We find that exports at the intensive margin account for the most important share of overall trade growth. At the extensive margin, geographic diversification is more important than product diversification, especially for developing countries. Taking part in FTAs, thereby reducing trade costs, and trading with countries in the North are also found to have positive impacts on export diversification for developing countries.export diversification, intensive margin, extensive margin

Preferential Trade Liberalization and the Range of Exported Products: The Case of the Euro-Mediterranean FTA

The paper investigates how Preferential Trade Agreements (PTAs) affect the range of goods exported by a nation. We use the Melitz model and highly dis-aggregated data on Euro-Mediterranean trade to measure the effect of preferential trade liberalization on the range of traded products. By focusing on the zeros in the trade matrix, the paper finds evidence that at the time when the Euro-Mediterranean FTA started there was an expansion in the range of products traded by its members.International Economics, Melitz model, Trade policy, development, developing countries, new goods, Euro-Med, Mediterranean, European Union, Euro-Mediterranean FTA, trade matrix, range exported products, FTA, preferential trade liberalization, zeros

Patterns of export diversification in developing countries: Intensive and extensive margins

This paper uses highly disaggregated trade data to investigate geographic and product diversification patterns across a group of developing nations for the period from 1990 to 2005. The econometric investigation shows that the gravity equation fits the observed differences in diversification across nations. We find that exports at the intensive margin account for the most important share of overall trade growth. At the extensive margin, geographic diversification is more important than product diversification, especially for developing countries. Taking part in FTAs, thereby reducing trade costs, and trading with countries in the North are also found to have positive impacts on export diversification for developing countries