Regional Trade Policy Options for Tanzania : The Importance of Services Commitments

Despite the growing importance of commitments to foreign investors in services in regional trade agreements, there are no applied general equilibrium models in the literature that assess these regional impacts. This paper develops a 52 sector applied general equilibrium model of Tanzania with foreign direct investment, and uses that model to assess Tanzania's regional and multilateral trade options. The model incorporates the features of the modern theory of international trade that has shown empirically that trade and foreign direct investment can increase productivity, and trade and foreign direct investment with technologically advanced countries is especially valuable for that purpose. To assess the sensitivity of the results to parameter values, the model is executed 30,000 times, and the results are reported as confidence intervals of the sample distributions. The analysis finds that a 50 percent preferential reduction in the ad valorem equivalents of barriers in all business services by Tanzania with respect to its African regional partners would be slightly beneficial for Tanzania. But wider liberalization, with larger partners or multilaterally, it will yield much larger gains due to providing access to a much wider set of service providers. Finally, the results show that the largest gains in services would be derived from reduction of regulatory barriers that are geographically non-discriminatory.

Bibliographic Details

Main Authors:	Jensen, Jesper, Tarr, David G.
Language:	English
Published:	2010-11-01
Subjects:	ACCOUNTABILITY, ACCOUNTING, ADJUSTMENT POLICIES, ADVANCED COUNTRIES, AFFILIATES, AGRICULTURE, AIR, AIR FREIGHT, AIR TRANSPORT, BALANCE OF PAYMENTS, BANK LOANS, BANK OF TANZANIA, BANK OFFICE, BANKING SECTOR, BANKING SUPERVISION, BARRIER, BASE YEAR, BORDER CROSSINGS, CAPITAL STOCKS, CARS, COLLATERAL, COMMODITY, COMMUNICATION TECHNOLOGY, COMPARATIVE ADVANTAGE, COMPETITIVENESS, CONGESTION, CONSTANT RETURNS TO SCALE, CONSUMERS, CONTRACT ENFORCEMENT, COST STRUCTURE, COST STRUCTURES, COUNTRY MARKET, COUNTRY MARKETS, CREDIT BUREAU, CREDIT CULTURE, CROSS-ELASTICITY, CROSSING, CUSTOMS UNION, DEMAND CURVE, DEMAND CURVES, DEPOSIT, DEPOSITS, DEVELOPING COUNTRIES, DEVELOPING COUNTRY, DEVELOPMENT INTENSITY, DOMESTIC BANKS, DOMESTIC MARKET, E-BUSINESS, ECONOMETRIC ESTIMATES, ECONOMIC ACTIVITY, ECONOMIC GEOGRAPHY, ECONOMIC GROWTH, ECONOMIC THEORY, ECONOMICS LITERATURE, ECONOMIES OF SCALE, EFFECTIVE USE, ELASTICITIES, ELASTICITY, ELASTICITY OF DEMAND, ELASTICITY OF SUPPLY, ELECTRONIC COMMERCE, EMPIRICAL EVIDENCE, EQUILIBRIUM, EQUILIBRIUM MODELS, EQUILIBRIUM PRICE, EXCHANGE RATE, EXPENDITURES, EXPORT MARKET, EXPORT MARKETS, EXPORTS, EXTERNALITIES, EXTERNALITY, FACTORS OF PRODUCTION, FINANCIAL INSTITUTIONS, FINANCIAL MARKETS, FINANCIAL SERVICES, FINANCIAL SUPPORT, FINANCIAL SYSTEM, FIRM PERFORMANCE, FOREIGN BANKS, FOREIGN CURRENCY, FOREIGN CURRENCY DEPOSITS, FOREIGN DIRECT INVESTMENT, FOREIGN ENTRY, FOREIGN FIRM, FOREIGN FIRMS, FOREIGN INVESTORS, FOREIGN OWNERSHIP, FOREIGN TRADE, FREE TRADE, FREE TRADE AGREEMENT, FREE TRADE AGREEMENTS, FREIGHT FACILITIES, FREIGHT SERVICES, GDP, GOVERNMENT SECURITIES, GROSS DOMESTIC PRODUCT, HOME COUNTRY, HOUSING, HOUSING FINANCE, IMPERFECT COMPETITION, IMPORT TARIFFS, INCOMES, INCREASING RETURNS, INCREASING RETURNS TO SCALE, INDUSTRIAL COUNTRIES, INFRASTRUCTURES, INSTITUTIONAL CAPACITY, INSURANCE, INSURANCE MARKET, INSURERS, INTEREST RATE, INTERMEDIATE GOODS, INTERMEDIATE INPUTS, INTERNATIONAL AIR TRAVEL, INTERNATIONAL TRADE, INTERNATIONAL TRAVEL, JOURNEY, LEGISLATION, LESS DEVELOPED COUNTRIES, LIFE INSURANCE, LOCAL CURRENCY, MARGINAL COST, MARGINAL COSTS, MARGINAL REVENUE, MARKET ACCESS, MARKET SHARE, MARKET SHARES, MICROFINANCE, MONOPOLISTIC COMPETITION, MORTGAGE, MORTGAGE MARKET, MULTILATERAL TRADE, NET LOSS, NEW ENTRANTS, NEW PRODUCTS, OPEN ECONOMY, PAYMENTS SYSTEM, PER CAPITA INCOME, POWER PARITY, PRIVATE SECTOR CREDIT, PRODUCERS, PRODUCT DIFFERENTIATION, PRODUCTION FUNCTION, PRODUCTIVITY, PRODUCTIVITY GROWTH, PRODUCTIVITY INCREASES, PROFITABILITY, PROVISION OF CREDIT, PURCHASING POWER, RAIL, RAIL FREIGHT, RAILROADS, RAILWAY, RAILWAYS, REAL ESTATE, REFORM PROGRAM, REGIONAL TRADE, REGULATORY AUTHORITY, REGULATORY ENVIRONMENT, REGULATORY FRAMEWORK, REGULATORY REGIME, REGULATORY REGIMES, REINSURANCE, REINSURANCE ARRANGEMENTS, RESIDENTIAL MORTGAGES, ROAD, ROAD NETWORK, ROAD TRANSPORT, ROADS, ROUTES, SINGLE MARKET, SMALL COUNTRIES, SUBSIDIARIES, SUPPLY CURVE, SUPPLY CURVES, TARIFF BARRIERS, TAX, TECHNOLOGY TRANSFER, TELECOMMUNICATIONS, TELEPHONE SERVICE, TERMS OF TRADE, TOTAL FACTOR PRODUCTIVITY, TRADE DIVERSION, TRADE LIBERALIZATION, TRADE POLICIES, TRADE POLICY, TRAFFIC, TRAFFIC MANAGEMENT, TRANSIT, TRANSPARENCY, TRANSPORT, TRANSPORT AUTHORITIES, TRANSPORT FACILITATION, TRANSPORTATION, TRANSPORTATION COSTS, TRANSPORTATION SERVICES, TRUE, VALUE ADDED, VALUE OF OUTPUT, VARIABLE COSTS, VEHICLE, WELFARE ECONOMICS, WELFARE GAINS, WORLD MARKET, WTO,
Online Access:	http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20101117083006 https://hdl.handle.net/10986/3963
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