B. Sample includes 15 advanced economies.

B. Sample includes 100 emerging markets and developing economies.

C. Sample includes 21 low-income countries.

# **_Price controls on exports and imports_**

EMDEs, including LICs, apply price controls on export and import goods.<sup>5</sup> Governments often impose controls on the domestic prices of imports to maintain real incomes of domestic consumers, hold down costs to producers, or smooth domestic price volatility. In LICs, about 67 percent of energy imports—about 6 percentage points more than the average for other EMDEs—are potentially subject to domestic price controls (Figure 4.A-B). In both LICs and other EMDEs, only a small share of food and beverages imports are potentially subject to controls. The largest difference between LICs and other EMDEs lies in the share of construction-related imports that are potentially subject to price controls: in LICs, they amount to one-quarter of imported construction materials, compared with almost none in other EMDEs. In contrast to the case of EMDES, the amount of advanced economy imports potentially subject to controls is negligible.

**Figure 4. Price controls on imported goods**

## **A. Share of total imports subject to price controls**

## **B. Share of 2-digit HS category imports subject to price controls**

<!-- Start of picture text --> Percent of imports Percent of imports Percent of Percent of<br>LICs category imports category imports<br>1.5 15<br>Other EMDEs 30 LICs 80<br>1.0 Advanced economies 10 20 Other EMDEs 60<br>Advanced economies<br>40<br>0.5 5 10<br>20<br>0.0 0 0 0<br>materials Energy (RHS) Food and Beverages Others (RHS) materials Energy (RHS) Food and Beverages Others<br>Construction Construction<br><!-- End of picture text --> Source: World Bank; World Integrated Trade Solution (WITS); World Trade Organization A.B. EMDEs = emerging markets and developing economies; LICs = low-income countries. A. 2017 data. Listed price control policies are retrieved from the latest (2003-19) country Trade Policy Review publication. Sample includes 12 low-income countries, 63 other EMDEs and 6 advanced economies. B. 2017 data. Listed price control policies are retrieved from the latest (2003-19) country Trade Policy Review publication. Sample includes 12 low-income countries, 63 other EMDEs and 6 advanced economies. Share of 4-digit Harmonized System (HS) category subject to controlled prices in high-level groupings of 2-digit HS categories. Construction materials aggregate includes HS68 and HS73, Energy aggregate includes HS27, Food and Beverage aggregate includes HS01 to HS22. Other aggregate includes all other imports.

EMDEs often impose price controls on exportable commodities. This may involve a monopoly marketing agency, which purchases from domestic producers at a fixed price, and resells to foreign purchasers at the world price. This arrangement implicitly taxes producers when the resale price exceeds the purchase price (Ghosh and Whalley 2004) or subsidizes producers when the resale price falls below the purchase price. About 25 percent of EMDEs that rely heavily (with more than 10 percent of goods exports) on a single export commodity group impose price controls on it 5 Unregulated prices depend on the world price, transport costs, local monopoly power or other hurdles to the movement of goods, and harvest conditions (Aksoy and Ng 2010).

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