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The other notable examples of changes in trade policy in the second half of 1990's involve the application of restructuring clauses by Poland. 44 In 1994, for the first time, the clause was applied to imported telecommunication equipment from the EU members. According to the government, the decision resulted from the necessity to restore the profitability of telecommunication equipment manufacturing in Poland that was heavily dependent on imported components. The restructuring clause was also used in 1996 to oil-refining products. Poland extended the period of reducing customs duties on oil-refining products until 2001 (according to the original timetable, customs duties were to be brought down to 0 at the beginning of 1999). 45 The restructuring clause, was applied for the third time, in 1997. Poland decided then to maintain tariffs at 9% in order to protect its restructuring of steel industry, despite the time-table of liberalization under Europe Agreement. One can reasonably argue that the application of restructuring clauses resulted from efficient lobbying, since this was almost explicitly foreseen by article 28 of the Europe Agreement. The third and the most spectacular case involves the application of various import-reducing measures applied to imported gelatine. The main lobbyist was Mr. K. Grabek, the owner of three out of four factories producing gelatine in Poland and the sixth richest individual in Poland in 1999. He managed to get support from press and many influential politicians. Due to his lobbying, the sanitary norm for gelatine became more restrictive in 1993, the variables levies were introduced in 1995, and import duties were increased (from 15 to 56 per cent) in 1995. Finally, a total import ban on gelatine was imposed in 1998, under the claim that imported gelatine - if produced from bones of animals suffering from mad-cow disease - can be a public health hazard. 46 What was therefore the role of lobbying in early 1990’s? According to sociological questionnaire surveys made in 1993, the role of lobbies in Polish Parliament was quite important. The Members of the Parliament believed that the second task of the MP is to represent interest groups (11.1 percent of replies), and third to “organize the economy” (10.5 per cent of replies). On the other hand they believed that the organized interest groups did 44 Michalek (2005). 45 Poland's Foreign Trade Policy, 1995-1996, p.58-59. 46 Jasiecki, Moleda-Zdziech and Kurczewska (2000), p. 99-101. 77
have important impact on political decisions taken by other MPs (13 percent of replies). 47 The objective of this paper is to trace the impact of organized groups on Poland’s government objectives using the methodology from Goldberg and Maggi study. Estimation technique and data In our study we adopt a modified version of the empirical specification proposed by Goldberg and Maggi. In the original paper, the authors estimate equation (3) in a maximum likelihood framework. Since both variables, inverse import penetration and industry organisation dummy may be affected by the level of tariffs, there might be an endogeneity problem. This is resolved by using instruments for both variables in question. The endogeneity problem is more severe in the case of inverse import penetration, which may be heavily affected by the tariff on the left hand-side of the equation (3). Also, what the Grossman and Helpman model cares about is trade flows that stem from the Heckscher-Ohlin type of comparative advantage. In the first stage model we construct the inverse import penetration ratio in the same fashion as Maggi and Goldberg (see equation 3 further below). In order to avoid the endogeneity problem, we regress the actual inverse import penetration ratio on capital share in output, investment share in output, labour share in output, employment level and investment level. In this way we project the theoretical inverse import penetration as a reflection of comparative advantage stemming from factor endowments. Following Maggi and Goldberg, we have also estimated an alternative version of the first stage model where we also included concentration indices and the share of subsidies in output. Therefore, we estimate two versions of the first stage model with concentration and subsidies excluded (model 1) and included (model 2). The results of first stage regressions are given in the Appendix (Table 3). Including concentration and subsidies does not add to the overall fit of the first stage model. In our case, the data on the industry contributions were unavailable, since in the 1990s there was no official way for the industry to contribute to political campaign. However, as the 47 Wesołowski ed. (1998), p. 140 and 182. 78
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In collaboration with: F E M I S E
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Table of contents INTRODUCTION AND
Page 5 and 6:
Introduction and summary In the pro
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that of the NMS, we would observe a
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accession to the EU. Instead, a num
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trade area (FTA). The Agadir Agreem
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liberalization has taken five years
Page 15 and 16:
signed Europe Agreements, EFTA and
Page 17 and 18:
used as industry organization varia
Page 19 and 20:
The main goal of the project was to
Page 21 and 22:
Chapter 1: Assessing trade liberali
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Agricultural Policy (CAP). Further
Page 25 and 26:
Agreements concluded with the MPCs.
Page 27 and 28: n lnTijt = ∑ k= 1 β RTAijt + α1
Page 29 and 30: Preferential trade liberalization i
Page 31 and 32: the EU enlargement, the EFTA lost t
Page 33 and 34: The most important of these was the
Page 35 and 36: The Definitions of the Variables an
Page 37 and 38: Estimates for the whole CEE sample
Page 39 and 40: agreements is, however, mixed. Whil
Page 41 and 42: The OLS estimates suggest that both
Page 43 and 44: Czech Republic Estonia Hungary Lith
Page 45 and 46: Czech Slovak Republic Estonia Hunga
Page 47 and 48: products. The provisions of the Eur
Page 49 and 50: foreseen to take effect in 2005. Ho
Page 51 and 52: Similar to the AMU, the ACC was for
Page 53 and 54: Unfortunately, the data on capital
Page 55 and 56: Table 2. The estimates for bilatera
Page 57 and 58: obust, while the dummy variable for
Page 59 and 60: Yi (partner) 0.944 1.009 2.267 1.96
Page 65 and 66: Agreements on the third countries a
Page 67 and 68: Chapter 2: Grossman-Helpman Model I
Page 69 and 70: N function (U ), given by: + ( ) u
Page 71 and 72: ti 1+ ti xi Ii −α i mi = ⋅ ,
Page 73 and 74: Probably the most extensive list of
Page 75 and 76: eginning of 1990. But the tariff st
Page 77: The non-preferential (MFN, conventi
Page 81 and 82: xi where ti is the tariff, ei is th
Page 83 and 84: We can recover the structural param
Page 85 and 86: Appendix Table 2 Estimation results
Page 87 and 88: Table 4 Estimation results using mo
Page 89 and 90: Testing Grossman-Helpman model for
Page 91 and 92: practice most importers do not pay
Page 93 and 94: countries were traditionally subjec
Page 95 and 96: point to notify the US government o
Page 97 and 98: and between 157% and 247% in 2004.
Page 99 and 100: policy reforms. On the other hand i
Page 101 and 102: Table 1 Estimation results for Isra
Page 103 and 104: 1995 0.00202 [2.04]** -0.00199 [2.0
Page 105 and 106: extended to disaggregation of burea
Page 107 and 108: The Importance of Corruption A subs
Page 109 and 110: transition countries. Sekkat and Ve
Page 111 and 112: society. In addition, they show tha
Page 113 and 114: Johnson, Kaufmann, McMillan, and Wo
Page 115 and 116: corruption. For example, upon grant
Page 117 and 118: and criminal prosecution. On the ot
Page 119 and 120: estimation are likely to be influen
Page 121 and 122: levels have been used to derive fur
Page 123 and 124: Union. In fact, the level of regula
Page 125 and 126: Table 2 List of the Commonly Raised
Page 127 and 128: Table 6 Predicted improvement (show
Page 129 and 130:
SB_PR all procedures required to re
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AFGHANISTAN, ALBANIA, ALGERIA, ANGO
Page 133 and 134:
Brunetti, Aymo; Kisunko, Gregory an
Page 135 and 136:
Hines, J.R. (1995). Forbidden Payme
Page 137 and 138:
PellegriniI, Lorenzo and Gerlagh, R
Page 139:
World Bank (2005). Doing Business i
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