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Policy Research Working Paper The State of Global Services Trade Policies Evidence from Recent Data Laura BaikerIngo BorchertRoberto EchandiAna M. FernandesIshrat HansJoscelyn MagdeleineJuan A. Marchetti Policy Research Working Paper11242 Abstract The economic environment for services trade has changeddramatically over the past 15 years, driven by rapid tech-nological progress that has expanded the possibilities forexchanging services. How has trade policy responded tothese changes? How do policy stances in a wide rangeof service sectors compare across economies? With itsunprecedented global coverage, the Services Trade PolicyDatabase and the associated Services Trade Restrictions (2016–22) changes in policy stances have seen progressiveliberalization by lower-income economies but stabilizationor even slight policy reversals in high-income economies.This dynamic differs fundamentally from the trend thatunfolded after the Great Recession over 2008–16. Third,the paper shows the implications of policy changes over thepast six years on services trade costs, and it showcases howthe Services Trade Policy Database’s regulatory informa- The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about developmentissues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry thenames of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those The State of Global Services Trade Policies: Evidence from Recent Data Laura BaikerIngo BorchertRoberto EchandiAna M. FernandesIshrat HansJoscelyn MagdeleineJuan A. Marchetti JEL codes: F13, F14, F23, L80, O24 Keywords: services trade policy, investment, STRI, trade restrictions, quantification. 1Acknowledgments: The authors would like to express their gratitude to all WTO and World Bank colleagues who assistedin the process of updating and expanding the WB-WTO Services Trade Policy Database, which underpins this paper, especiallyFaith Abraham, Fatima Anjum Quraishi, Prakhar Bhardwaj, Giulia Jonetzko, Sabreen Khashan, Henrique Monteiro Souza, CloéTorbay, and Clémence Moreau. Cooperation by the OECD Secretariat, which made available data from the OECD ServicesTrade Restrictiveness Database, which was used as source of information in the World Bank-WTO Services Trade PolicyDatabase for 43 economies in 2016 and for 49 economies in 2022, is gratefully acknowledged. This paper is part of a World 2Disclaimer: This is a working paper, and hence it represents research in progress. The findings, interpretations, andconclusions expressed in this paper are entirely those of the authors. They are not intended to represent the positions oropinions of the WTO or its Members and are without prejudice to Members' rights and obligations under the WTO. They 1 INTRODUCTION ........................................................................................................................................ 3 2 THE NEW 2024 WB-WTO SERVICES TRADE POLICY DATABASE ................................................................... 6 2.1UPDATES ON THECOVERAGE OF THESERVICESTRADEPOLICYDATABASE.................................................................... 62.2UPDATES TO THEQUANTIFICATION OFAPPLIEDSERVICESTRADEPOLICIES................................................................... 72.2.1 Measure selection and data................................................................................................................. 72.2.2 Determination of level of restrictiveness.............................................................................................. 82.2.3 Aggregation ......................................................................................................................................... 92.2.4 Key desirable properties of aggregating restrictiveness scores with a CES function ......................... 13 3 THE GLOBAL STATE OF SERVICES TRADE POLICIES 2019-22 (134 ECONOMIES) ......................................... 15 3.1SERVICESTRADEPOLICYRESTRICTIVENESS ACROSSBROADSECTORS......................................................................... 153.2SERVICESTRADEPOLICYRESTRICTIVENESS ACROSSINCOME,GEOGRAPHICAL ANDECONOMICGROUPINGS...................... 163.3SERVICESTRADEPOLICYRESTRICTIVENESS ANDECONOMICCHARACTERISTICS............................................................ 203.4SERVICESTRADEPOLICY ANDGOODSTRADEOPENNESS......................................................................................... 22 4 SHIFTS IN SERVICES TRADE POLICY STANCE 2016 – 2022 (69 ECONOMIES)............................................... 29 4.1GLOBALTRENDS INSERVICESTRADEPOLICY OVER THE PAST6YEARS........................................................................ 294.2COMPARISON TO2008-16:THETIDE HAS TURNED..........................