Industrial Policy and Competitiveness: Non-Tariff Barriers and Incentives to Innovate

Countries use non-tariff barriers (NTBs) as instruments of industrial policy. NTBs often are difficult to observe and hard to adjust because they are part of national regulations. NTBs are inflexible in comparison to tariffs. The number of NTBs has expanded significantly. The article concludes that NTBs can impede technological change and harm incentives to innovate.