Comparison of efficiencies in protectionist and liberal cabotage policies

Abstract

This paper focuses on cabotage, which is a long-standing regulation that restricts coastal trade to domestic ships. As globalisation has grown, global trade organisations have pushed for the removal of these barriers to promote a competitive market environment. In this research, Data Envelopment Analysis (DEA) is used to evaluate and compare the efficiencies of countries which have protectionist and liberalised cabotage policies. To do this, maritime statistics in 2022 from the World Bank database are considered for 50 different countries. We find that both protectionist and liberal policies have advantages and disadvantages, but neither is inherently superior. In addition, cabotage policies must be structured according to each country’s conditions, and a delicate balance must be established between these policies, considering the dynamics of the global economy. This paper has also considered advantages and disadvantages by comparing countries that have different policies on cabotage, such as the UK and Türkiye, to show how cabotage regulations generate different perspectives created by their respective maritime pasts and geopolitics. In terms of an effective and competitive maritime industry, the study is one of the unique types of research that underlines the need for a cabotage strategy balanced between the liberalised and protectionist components.