Politically Optimal Tariffs: An Application to Egypt

RePEc: Research Papers in Economics, 2000

Review of Development Economics, 1997

A computable general equilibrium model of Egypt is developed to analyze proposed reforms in its trade policies, including a partnership agreement with the European Union. The model has multiple trading regions and allows for administrative trade barriers and tariffs. The paper reports computations of the revenue impacts of trade liberalization and the required changes in distortionary commodity taxes to maintain a fixed real government budget. Egypt's greatest potential gains come from removing its administrative trade barriers while adopting globally free trade. The partnership agreement with the EU could lower or raise Egypt's welfare, depending on prior trade reform.

How The Globalization of Markets Through Free Trade Agreements Can Benefit Developing Countries Like Egypt, 2019

This research shall try to prove that the globalization of markets through free trade can be beneficial to a developing countries’ local businesses specially the small and medium businesses. I shall start by defining free trade, its types and discuss its benefits to the foreign investor. Furthermore, I shall discuss the benefits of free trade in developing countries’ being invested in. As well as that, I will start talking about the necessity of economic reform in most developing countries in order to implement free trade and how those countries can protect themselves from any negative outcomes as a result of free trade. Last but not least, I shall discuss the practical application of free trade and economic reform in Egypt My methodology will be the comparative analytical methodology which requires me to: 1. Take note of the general economic situation in Egypt and a perform a full PESTLE analysis on Egypt post the most recent economic reformation that started in 2014. 2. Collect data about recent international investments carried out in Egypt and a review about how that will benefit Egypt. 3. Collect data about Egyptian investments in African countries through the COMESA shall be collected as well how that will be beneficial to both sides. 4. Study, examine and analyze the question or problem that the research to which the research addresses its attention, examines it and analyzes it. 5. Select an appropriate general rule for the known issue from among the applicable, overall applicable or relevant rules to this matter. 6. Determine the effects resulting from the application of the general rule to the issue at hand, as well as the comparison, which is based on the study of rules and regulations governing social and legal relations in different countries and not limited to studying them in a single legal framework. Therefore, globalization including free trade done through the GATT and various other application of free trade and thus foreign investment can be beneficial to a developing countries’ local businesses specially the small and medium businesses.

Review of Development Economics, 2003

The paper addresses the question of whether trade restrictiveness impacts economic performance, via a trade restrictiveness index that is decomposable into a trade distortion and a domestic distortion component. The paper builds on the Anderson and Neary price index measure of trade distortion, in evaluating trade restrictiveness via a distance function approach. This is accomplished by adding a "dual" version to their trade restrictiveness price index, based on distance functions that scale output quantities. The authors compute the trade restrictiveness quantity index (TRQI) using a parametric frontier approach to model the production side of the economy, and a panel of information on the agricultural sector of a set of European Community countries.The results suggest that the use of TRQI makes a considerable difference to interpretations of the efficiency impact of agricultural trade policies in EC countries, as compared to policy-oriented aggregates or result-oriented measures of trade restrictiveness. . We are grateful to Kevin Fox and an anonymous referee for very helpful suggestions and comments. The usual disclaimer applies.

The World Bank Economic Review, 2008

The Political Economy of Import Substitution Industrialization in Egypt (1950-1970), 2017

This article tries to shed light on Import Substitution Industrialization (ISI) in Egypt. The country had witnessed political instability, social changes, and economic hardships. In this regard, those signs are better understood by having a retrospective view into its economic and political history. Egypt drowned in many wars after it got over being a British Colony. We attempt to analyze political and economic institutions and their role in political economy of the country. Political, international , economic, and institutional context differed with each government and president. This explains the divergence in economic performance. It is argued that some factors such as the institutional framework, political and economic ideology, social coalitions, and international financial institutions affected by the implementation and success of ISI.

The focus of this evaluation is on USAID/Egypt’s trade policy and customs reform activities since 1992. During this period Egypt experienced several stages of economic growth, initially associated with the Government’s protectionist policies and switching policies designed in some instances to promote growth and, in others, to encourage stabilization. In more recent years the Government has pursued efforts to enhance the country’s international competitiveness by liberalizing trade, realigning the exchange rate, and deregulating trade and investment to promote private sector development. These efforts have proven effective notwithstanding external shocks following the Luxor incident and post-September 11 events, as well as some entrenches public sector attitudes towards the private sector. Whether recent reforms translate into higher export growth rates remains to be seen. Egypt still under-exports to large EU countries, directing much of its commerce to small countries with limited market growth potential, and it substantially under-exploits the United States as an export market. USAID/Egypt’s impact on the trade since the early 1990s has been primarily through technical assistance and policy-based cash transfer programs. In the 1990s its activities focused on increased exports and privatization of state-owned enterprises as the engine for economic growth. More recently, it has centered its efforts on customs and trade facilitation, as well as financial sector reforms. The performance of its programs has been monitored through both quantitative measures and qualitative techniques measuring perceived change in the policy environment. Nevertheless, lack of clearly defined goals and strategies has sometimes led to excessively broad-based impact indicators or ambivalent outcomes and impact measurements. The present impact assessment for 1992-2005 has examined six programs and projects specifically concerned with trade policy and customs reforms: the policy-based cash transfer programs of the Sector Policy Reforms (SPR) and Development Support Program (DSP); technical assistance provided to the SPR and DPR programs through the Technical Support for Sector Policy Reform (TSSPR) project; technical assistance provided on trade policy and regulatory reforms to the Ministry of Foreign Trade and Economy through the Development Economic Policy Reform Analysis (DEPRA) project; technical assistance provided on trade facilitation under the Technical Assistance for Policy Reform (TAPR) project; technical assistance provided on trade policy and regulatory reforms to the Ministry of Trade and Industry by the Assistance for Trade Reform (ATR) project; and technical assistance provided to the customs authority by the Assistance for Customs and Trade Facilitation (ACTF) project. These programs and projects have been designed to encourage policy change and facilitate activities that normally have well-defined outputs, generate outcomes in the enabling environment, and lead to impacts that reflect the strategy and goals of USAID/Egypt and the GOE. It is important to underscore that outcome in this context refers to the changes in the enabling environment for trade that occur as a result of the implementation of activities and are classified in terms of changes in the target interventions or major instruments used in trade policy and customs reforms. In contrast, impact extends well beyond the outcomes of an activity and refers to the effect that the activity produces on trade, output, employment and other economic activities. It is one of the five core evaluation criteria for policy-based initiatives, the others being relevance, efficacy, efficiency and sustainability. Together these components influence outcome and ultimately impact, so they are also considered in the present evaluation. The impact assessment of these activities on trade policy and customs reforms has used quantitative methods based on partial equilibrium analysis of tariff reforms to measure their trade and tax revenue impact; macroeconomic modeling techniques to measure the feedback effects of trade liberalization on the economy as a whole; and surveys of processing time through customs as a means of measuring outcomes rather than impact from trade facilitation initiatives. The first two analytical techniques focus on the impact associated primarily with tariff reforms since impact analysis of non-tariff barriers (NTBs) reforms require information that is currently unavailable in Egypt on the price wedge between domestic and border price. Cognizance of those prices wedges would allow us to determine the price equivalent of NTBs and use that information in the tariff-based modeling techniques. A fourth modeling approach was unable to be carried out due to time limitations and consisted of shift analysis relating changes in effective rates of protection to industry-specific output and employment effects of the reforms. Overall, the outcome of USAID/Egypt’s trade-related assistance since 1992 is rated as satisfactory, with specific strengths identified as the consistency of USAID/Egypt’s program with the Government’s development strategy; the sustainability of USAID/Egypt’s overall assistance; USAID/Egypt’s strong support for policy and regulatory reforms; the leading role of USAID in supporting a coherent strategy for the GOE; flexibility and adaptability of its programs; stakeholder ownership of USAID assistance; the recent increase in effectiveness of capacity building efforts; the generally successful coordination of projects with development partners; outcomes generally having been met or exceeded based on USAID/Egypt’s target benchmarks; implementation of second generation reforms and trade facilitation measures; trade policy and customs reform programs and projects being well-integrated into economy-wide development initiatives; and USAID/Egypt’s development assistance output in trade-related activities having scored well during the period under review. Some of the areas were programs and projects could be improved upon relate to the need to more clearly defined their outcomes and impact objectives within USAID/Egypt’s strategic objectives; possibly bolstering its effectiveness in implementing trade policy reforms through the policy-based cash transfer programs; more clearly distinguishing between output and impact benchmarks when reviewing performance and including benchmarks that better reflect changes in trade control measures; improving its support for understanding the impact of WTO and other international commitments by Egypt, before those commitments are made; ensuring continuity of activities between its program sequencing activities; and providing for systematic assessments of trade capacity building effectiveness in its projects. These findings pointed to lessons for future activities that are elaborated upon in the report.