The Costs of Data Protectionism

Abstract

Cross-border data flows are raising both economic and political concerns related to the concentration of data, data sovereignty, privacy, law enforcement, and national security. This has posed the question of whether countries should insist that companies process data within their jurisdictions and many countries have already enacted restrictions on the transfer of data across borders. However, it is yet not clear how different types of data policies impact trade. The chapter addresses the question by looking at whether data policies create a distortion on trade in services and explores the direct and indirect costs of data protectionism.