facilitation agenda has been developed, the question of what qualifies as a potential measure that facilitates trade in services remains unidentified. The core element of the concept of trade facilitation in services revolves around the administration and transparency of regulations. Regulatory measures dealing with facilitating trade in services would make it easier for foreign suppliers to access the domestic market for any given levels of (discriminatory) policy restrictiveness. As a result, one important component of a potential TFiS agenda is not to liberalize services markets by undertaking regulatory reform as such, but to improve the implementation and administration of policies that broadly relate to reducing information costs for foreign as well as domestic service providers so as to make it easier for them to access domestic markets.

Reducing trade costs by way of regulatory reform and implementing sound regulatory procedures forms an important factor in the economy. Previous research has shown that reform in services markets not only improves productivity performance of services markets themselves (van der Marel, 2012), but also further downstream in the economy, namely for those that use services as inputs (Beverelli et al., 2017; Arnold et al., 2015; 2011). If the costs of using services are higher than they would be in a competitive market environment where regulatory policies are conducive to an effective supply of the service, they will form a non-revenue generating (for the government) tax on the economy. The focus of this paper is to determine how and what type of regulatory policies dealing with the ineffective rules and administrative procedures for both domestic but in particular for foreign service supplies can contribute to lower trade costs, thereby facilitating trade in services and ultimately contributing to greater levels of per capita gains.

This paper is the first one to take a functional approach to the concept of TFiS and attempts to provide a policy-relevant definition of the concept. It does so by discussing TFiS theoretically and by taking the concept of TFiS to trade data in order to analyze how the various aspects of TFiS form an important costs factor for trading services. Only in this way can a more focused discussion take place on developing the potentially useful idea of facilitating trade in services within the global trading community and to determine on which measures to focus when practically applying a policy-relevant agenda. The paper is organized as follows. The next session sets out a discussion on the concept of TFiS by setting out what it actually contains. Section 3 provides an empirical analysis of the potential determinants of TFiS as per the discussion in the preceding section, while Section 4 places the outcomes in broader context. The last section concludes.

# **2. Conceptualizing TFiS: What is it?**<sup>**2**</sup>

Broadly, measures that fall within the area of trade facilitation in services relate to notions such as “ **transparency** ”, “ **regulatory practices** ”, “ **regulatory cooperation** ”, “ **regulatory coherence** ”, and “ **good**

> 2 A first attempt to conceptualize TFiS and to determine what measures fall under the concept of TFiS, with members of the epistemic community on trade in services, was made during a conference in March 2017. This conference was held by the World Bank in collaboration with the Government of India. This section draws on some of background materials and discussions presented during this event.

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