On Measuring Protection: A Methodological Enquiry

Since the late sixties, this question has continued to engage the attention of the leading international trade theorists and empirical researchers. It has led to two distinct enquiries: 1. How to trace resource allocation effects of a Restricted Regime? 2. How to measure its economic costs? Two separate schools have distinctly centred round each of these questions. While the concept of effective protective rate (EPR) was designed to answer the first question, the concept of domestic resource cost (DRC) sought to deal with the second. The first is a positive question while the second is a normative one.