Understanding economic openness: a review of existing measures

This paper surveys measures of economic openness, the latter being understood as the degree to which non-domestic actors can or do participate in a domestic economy. Based on the existing literature, the authors introduce a typology of openness indicators, which distinguishes between ‘real’ and ‘financial’ openness as well as ‘de-facto’ and ‘de-jure’ measures of openness. They use data collected on these indicators to analyze trends in openness over time and to conduct a correlation analysis across indicators. Finally, they illustrate the potential consequences of employing different openness measures in a growth regression framework.