Surprisingly little is known about policies that affect international trade in services. Previous analyses have focused on policy commitments made by countries in international agreements, but in many cases, these commitments do not reflect actual policy. This paper describes a new initiative to collect comparable information on trade policies for services from 103 countries across a range of service sectors and relevant modes of service delivery. The resulting database reveals interesting policy patterns. Although public monopolies are now rare and few services markets are completely closed, we observe numerous "second-generation" restrictions on entry, ownership, and operations. Even in instances in which there is little explicit discrimination against foreign providers, market access is often unpredictable because the allocation of new licenses remains opaque and highly discretionary in many countries. Across regions, some of the fastest-growing countries in Asia and the oil-rich Gulf states have restrictive policies in services, whereas some of the poorest countries are remarkably open. Across sectors, professional and transportation services are among the most protected industries in both industrial and developing countries, whereas retail, telecommunications, and even finance tend to be more open. JEL codes: F13, F14, L80 Compared to the vast empirical literature on policies affecting trade in goods, empirical analysis of trade policy for services remains in its infancy. A major constraint has been inadequate data on policies affecting services trade, particularly

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Much attention has been focused on the impact of the current crisis on goods trade; hardly any on its impact on services trade. Using new trade data from the USA, and more aggregate data from other OECD countries, the authors show that services trade is weathering the current crisis much better than goods trade. On the basis of new evidence from Indian services exporters, it is suggested that services trade is more robust relative to goods trade for three reasons: less cyclical demand; lesser dependence on external finance; and few explicitly protectionist measures so far taken in services.

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. For a long time globalization could be seen everywhere but in gravity estimates. We offer evidence how globalization affects manufacturing trade over the period 1986-2006 and show that, on average, the effect of distance has fallen whereas the effects of proximity and regional trade agreements have increased over time. We also document substantial cross-country heterogeneity in the extent to which distance elasticities have changed. Countries in the middle of the per-capita income distribution have seen the steepest fall in distance coefficients. At the same time, distance as a trade friction has not lost its bite for a number of low income countries, which may jeopardize their integration into global markets. We present suggestive evidence that the heterogeneous change in distance elasticities is related to secular shifts in the composition of exports. Terms of use: Documents inJEL-Codes: F130, F140, F160.Keywords: distance puzzle, missing globalization, structural gravity, poor countries. Ingo Borchert Department of EconomicsUniversity of Sussex United BN1 9SL I.Borchert@sussex.ac.uk Yoto V. Yotov School of EconomicsDrexel University USA -Philadelphia, PA 19104 yotov@drexel.edu December 18, 2016 Highlights• We offer solutions to the 'distance puzzle' and the 'missing globalization puzzle' in trade.• On average, the effect of distance on trade fell by 10% between 1986 and 2006.• The effects of globalization on trade vary widely across the 69 nations in our sample.• The relationship between the gains from globalization and income is U-shaped.• Globalization benefitted middle income countries the most.

The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent.