If open regimes that include safeguards were adopted by all economies, global exports would grow by 3.6 per cent and global gross domestic product (GDP) by 1.77 per cent, the report notes.
Benefits would be highest for low and lower-middle income economies which could see their GDP rise by over 4 per cent, it says.
‘Full fragmentation’, where all economies fully restrict their data flows, would lead to global GDP losses of 4.5 per cent and reductions in exports of 8.5 per cent, the report, titled ‘Economic Implications of Data Regulation: Balancing Openness and Trust’, cautions.
However, the absence of data flow regulation is also associated with negative economic outcomes. If all economies removed their data flow regulation, trade costs would fall, but trust would also decline, it notes, highlighting a surge in regulations conditioning data flows or mandating that data be stored or processed domestically.
The implications of data flow regulations are not well understood, especially where they relate to finding a balance between enabling flows while also ensuring that data receives the desired safeguards when transferred abroad, the report says.
It looks into the potential costs of data flow regulation and the potential benefits that arise from growing trust in economic transactions undertaken within data protection frameworks.
With regards to measures explicitly mandating local storage or processing of data, the report underscores that the impact depends on the type of measure implemented. Developing economies would benefit most from removing data localisation measures, it adds.
ALCHEMPro News Desk (DS)
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