Books countering those tendencies (e.g, by Bhagwati 2004, Wolf 2004) have since helped. So too has the recognition that loan conditionality failed to ensure developing country governments stuck with agreed trade and other reform plans (World Bank 1998) such that aid and lending institutions are now targeting their funds selectively, rewarding more those countries with good economic governance (Dollar and Levin 2004). Nonetheless, continual vigilance by economists is required to scrutinize and respond to new calls for intervention. More than that, economists need to continue to press for unilateral liberalization and for the phasing out of important exceptions to the WTO rules aimed at encouraging liberalization (e.g., a ban on export subsidies, enforcing the requirement that reciprocal preferential trade agreements involve substantially all trade, the replacement of special and differential treatment for developing countries and non-reciprocal preferences for the least-developed with first-best ways of promoting their sustainable development).

# **_Better quantitative analysis_**

Notwithstanding the enormous progress that has been made in quantitative modelling in the past two decades, much scope for improvement remains. Theoretical developments have been running well ahead of empirical modelling, as the Feenstra (1995) survey and the final six chapters of Francois and Reinert (1997) make clear. Data developments and parameter estimation have been relatively slow (an international public good problem), as have efforts to specify well the policy instruments being modelled in both the base and reform scenarios. We begin with the latter, since it has been a major source of criticism of Uruguay Round modelling.<sup>25</sup>

# _a. Improving the specification of existing and alternative policy measures_

Several mis-specifications of policy measures are clear from the ex post and especially the ex ante modelling of Uruguay Round (UR) reforms. First, UR (as with past GATT and future WTO) commitments relate to reductions in bound tariff rates, not applied rates, and bound rates can be higher (in agriculture’s case often several times higher) than applied rates. Yet many modellers used applied rates in calibrating their models and then reduced them by the extent of the promised bound tariff cuts, thereby overstating the magnitude of reform – in some cases by a huge margin, given the dirty agricultural tariffication that occurred. Recent concerted efforts by GTAP consortium member institutions and others have ensured both sets of tariffs are available from late 2004. Care is also needed in specifying reform options when non-linear tariff and subsidy cuts are to be implemented (Francois and Martin 2003, Jean, Laborde and Martin 2005) Second, a wide array of tariff preferences operate for various groups of developing country exporters and among members of preferential-trade areas. In the past these have been ignored by most modellers, because such data have not been available in a form that they could readily use. That too has been rectified with the Version 6 GTAP data base. The expansion in the number of LDCs separately represented in the GTAP data base also aids quantitative analysis of this sensitive issue.

Third, it is in agriculture where most of the remaining gains from goods trade liberalization are to be found.<sup>26</sup> Reforming that sector should have been straightforward

> 25 Criticism has come even from within the international economics profession. See, for example, Panagariya (1999).

> 26 According to GTAP modelling results reported in Anderson et al. (2001) using Version 5 of the GTAP database, fully two-thirds of the gains from eliminating all merchandise import barriers globally in 2005, after

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