THE IMPACT OF TRADE TARIFFS ON ECONOMIC GROWTH IN CENTRAL ASIA: EVIDENCE FROM UZBEKISTAN
Authors/Creators
- 1. Westminster International University in Tashkent
- 2. Worldly Knowledge Publishing Centre
Description
This paper investigates the relationship between tariff policies and economic growth in Central Asia, with particular emphasis on Uzbekistan's post-2017 economic reforms. Tariffs may provide temporary protection for domestic industries. However, excessive trade barriers can reduce competitiveness and limit long-run growth. Instrumenting a balanced panel dataset covering Central Asian economies from 1996 to 2023, the study examines how variations in tariff rates affect real GDP growth.
The empirical analysis employs pooled OLS, Fixed Effects, and Driscoll-Kraay estimators while controlling for trade openness, foreign direct investment, inflation, capital formation, labor force participation, population growth, and institutional quality. The results consistently demonstrate a significant negative relationship between tariff rates and economic growth. Additional specifications indicate that Uzbekistan experiences a weaker negative effect compared with neighboring economies, suggesting that recent reforms may have moderated adjustment costs associated with trade liberalization.
The findings support gradual tariff reductions, deeper regional integration, and institutional improvements as important elements of sustainable growth strategies in Central Asia.
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References
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