A Practical Guide to Trade Policy Analysis (Volume 1)

This book is the outcome of joint work by the Secretariats of UNCTAD and the WTO. Its six chapters were written collaboratively by academics and staff of the two organizations. The volume aims to help researchers and policy-makers expand their knowledge of quantitative economic methods and data sources for trade policy analysis. The need for the book is based on the belief that good policy needs to be backed by good analysis. By bringing together the most widely used approaches for trade policy analysis in a single volume, the book allows the reader to compare methodologies and to select the best-suited to address the issues of today.

The most innovative feature of the book is that it combines detailed explanations of analytical techniques with a guide to the data necessary to undertake analysis and accompanying tutorials in the form of exercises. This approach allows readers of the publication to follow the analytical process step by step. Although the presentations in this volume are mostly aimed at first-time practitioners, some of the most recent advances in quantitative methods are also covered.

This book has been developed in response to requests from a number of research institutions and universities in developing countries for training on trade policy analysis. Despite the growing use of quantitative economics in policy making, no existing publications directly address the full range of practical questions covered here. These include matters as simple as where to find the best trade and tariff data and how to develop a country’s basic statistics on trade. Guidance is also provided on more complicated issues, such as the choice of the best analytical tools for answering questions ranging from the economic impact of membership of the WTO and preferential trade agreements to how trade will affect income distribution within a country.

Although quantitative analysis cannot provide all the answers, it can help to give direction to the process of policy formulation and to ensure that choices are based on detailed knowledge of underlying realities. We commend this guide to those engaged in creating trade policy and we hope that by contributing to the understanding of state-of-the-art tools for policy analysis, this guide will improve the quality of trade policy-making and contribute to a more level playing field in trade relations.