GEP Research Paper 03/06
Effective Protection, Policy Appraisal and Trade Policy Reform
D. Greenaway and C.R. Milner
This paper was subsequently published in The World Economy, Vol.26, pp.451-456 (2003).
Abstract
When the effective protection concept was first developed it was widely regarded as a key measure of the structure of protection and became widely deployed. It was however subject to a theoretical critique on the grounds that it was essentially a partial equilibrium measure, which could not be easily embedded in a general equilibrium framework. Notwithstanding this critique, the concept has continued to be widely used, especially in the context of policy reform and policy appraisal in developing countries. This paper re-appraises the concept, reviews the extent of its application and discusses the factors behind its longevity as an investigative tool. The paper concludes that the measure still has a role to play in evaluating the structure of protection.
Issued in February 2003.
This paper is available in PDF format.