and safeguard measures. Trade policy barriers increase the costs of exported goods abroad and the costs of importing goods. Ng and Yeats (1996) argue that the drastic decline in African exports has been related to closed trade regimes in Sub-Saharan Africa. Indeed, the authors suggest that high African tariffs on broad groups of production equipment and other goods (often key inputs in agricultural or manufacturing activity) represent additional direct costs for African producers.

Because trade policy can take different forms, it is difficult to find a single measure condensing trade policy restrictiveness. Although the impact of trade policy measures can be estimated as an ad-valorem equivalent for a single good, it can be useful to aggregate a large number of tariffs and other trade policy measures into a single figure that summarizes the overall level of restrictiveness in each country.

Kee, Olarreaga, and Nicita (2008) develop theoretically grounded indices based on research by Anderson and Neary (1994) of trade restrictiveness across countries. The Overall Trade Restrictiveness Index (OTRI) and the Tariff Trade Restrictiveness Index (TTRI) provide summary measures of trade policies affecting a country’s imports and allow comparison across 104 countries (counting the European Union as a single country). Both indices provide a measure of the equivalent uniform ad-valorem tariff, which, if applied by an importing country to its imports, would result in a level of aggregate imports equivalent to that prevailing under current policy settings. The OTRI captures all policies on which information is reported by international organizations collecting this data (International Trade Center (ITC), United Nations Conference on Trade and Development (UNCTAD), and the World Trade Organization (WTO). These comprise ad valorem tariffs, specific duties, and non-tariff measures (NTMs), such as price control measures, quantitative restrictions, monopolistic measures, and technical regulations.

In contrast, the TTRI is narrower in scope. This index considers only ad-valorem and specific tariffs. Because many NTMs are not necessarily protectionist in intent, the OTRI reflects net overall restrictiveness. It is not a measure of the level of protection that a government seeks to provide domestic industry. Some NTMs comprise border restrictions, such as quotas or bans, and are motivated by protectionist objectives. Other regulatory policies, such as sanitary and phytosanitary standards, are aimed at safeguarding human, animal, or plant health. Unfortunately, the measures do not allow distinction between objectives. Thus, protection is arguably better measured by the TTRI, even if this index is most suited to producing lower-bound estimates of the extent of protection in a market. Both measures can be aggregated at the sector level.

There are two other indicators available on trade restrictiveness—the Market Access OTRI (MA-OTRI) and the Market Access TTRI (MA-TTRI). These are estimates of the uniform tariff, which, if imposed by all trading partners on exports of a given country, would leave the country’s exports at their current level. The MA-TTRI measures restrictiveness associated with tariffs alone. The MA-OTRI can be calculated bilaterally in order to obtain the level of trade restrictiveness that a given importer country imposes on the exports of another exporter (see Kee et al., forthcoming, for details).

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