Resource information
In this paper the authors use a
computable general equilibrium model of the Kazakhstan
economy to assess the impact of accession to the World Trade
Organization (WTO), which encompasses (1) improved market
access; (2) Kazakhstan tariff reduction; (3) reduction of
barriers against entry by multinational service providers;
and (4) reform of local content and value-added tax policies
confronting multinational firms in the oil sector. They
assume that foreign direct investment in business services
is necessary for multinationals to compete well with
Kazakstan business services providers, but cross-border
service provision is also present. The model incorporates
productivity effects in both goods and services markets
endogenously, through a Dixit-Stiglitz framework. The
authors estimated the ad valorem equivalent of barriers to
foreign direct investment based on detailed questionnaires
completed by specialized research institutes in Kazakhstan.
They estimate that Kazakhstan will gain about 6.7 percent of
the value of Kazakhstan consumption in the medium run from
WTO accession and up to 17.5 percent in the long run. They
estimate that the largest gains to Kazakhstan will derive
from liberalization of barriers against multinational
service providers, but the other three elements of WTO
accession that the authors model all contribute positively
to the estimated gains. Piecemeal sensitivity analysis shows
that qualitatively the results are robust, but there are
four parameters in the model that significantly affect the
estimated magnitude of the gains from WTO accession.
