Research Handbook on Trade in Services
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Research Handbook on Trade in Services

Edited by Pierre Sauvé and Martin Roy

This Research Handbook explores the latest frontiers in services trade by drawing on insights from empirical economics, law and global political economy. The world’s foremost experts take stock of the learning done to date in services trade, explore policy questions bedevilling analysts and direct attention to a host of issues, old and new, confronting those interested in the service economy and its rising salience in cross-border exchange. The Handbook’s 22 chapters shed informed analytical light on a subject matter whose substantive remit continues to be shaped by rapid evolutions in technology, data gathering, market structures, consumer preferences, approaches to regulation and by ongoing shifts in the frontier between the market and the state.
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Chapter 7: Services trade and regulatory reform: A methodology for developing countries

Martín Molinuevo and Sebastián Sáez


Services policies and regulations often fail to respect the basic principles of transparency and non-discrimination. Regulatory quality depends not only on the regulation-making process but also on regulatory institutions. In developing countries, these institutions are often weak. Reforming regulations affecting trade in services requires an assessment of whether a country should also remodel, strengthen, or create the regulatory institutions responsible for issuing and enforcing laws and regulations. Policymakers need to address both regulations and the framework in which they are designed, adopted, and applied to fully reap the benefits of services trade. The empirical literature on trade in services identifies a number of factors that affect performance in the sector. Chief among them are the quality of regulations, regulatory institutions, and governance. But countries confront a number of different options when undertaking policy reforms. This chapter proposes a methodology to assist countries in identifying restrictions to services trade, assessing their impact, and developing suitable regulatory alternatives. The methodology also covers the institutional setting and institutional arrangements for reform, because the way governments administer and implement the laws and regulations may affect trade. The objective of the methodology is to help policymakers assess regulations consistently, streamline the regulatory framework, and set up a process for introducing new regulations. The chapter concludes with policy recommendations.

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