THE TRADE RESTRICTIVENESS INDEX: THE POTENTIAL CONTRIBUTION TO AGRICULTURAL POLICY ANALYSIS

In the policy arena, there is a demand for "trade distortion indicators", but many of the traditional indices are difficult to compute and interpret. Recent developments in the literature have led to a new indicator: the Trade Restrictiveness Index (TRI). This paper analyzes some problems related to the TRI's computation and interpretation. We argue that the index is theoretically well grounded and offers potential for measuring the relative importance of agricultural policy distortions. However, the name of "trade restrictiveness" index is seriously misleading, since the TRI does not provide a measure of trade flows restrictions.