Trade Liberalisation and IMF Structural Adjustment Programs
About the project
Most countries significantly liberalized their trade policy over the past decades resulting in halving the world-wide average tariff rate. Reasons for this drastic shift have been identified in economic crisis, internal interests, the spread of policy ideas, and external pressure. One piece of the puzzle regarding external pressure might be conditionality to lower tariff rates in Structural Adjustment Programs (SAPs) of the International Monetary Fund (IMF) during times of economic crisis. At the same time, non-tariff measures became the dominant trade policy tool of many countries, a dynamic known as trade policy substitution. In this light, we investigate the effects of conditionality to decrease tariff rates by the IMF on tariff and non-tariff measures.