Arbeitspapier
Revenue Motives and Trade Liberalization in an Endogenous Tariff Model
Governments in more developed economies partially compensate import-competing industries when world prices fall, i.e. they lean against the wind. In less developed economies we often observe liberalization in response to the same shock. We use a political-support maximization model with revenue motives to derive conditions under which a rational policy-maker would respond to lower world prices by reducing tariff protection for an import-competing industry. An initial tariff that exceeds the maximum revenue level proves necessary but not sufficient for politically optimal liberalization following a fall in the world price of the importable good.
- Language
-
Englisch
- Bibliographic citation
-
Series: Working Paper ; No. 1994-12
- Classification
-
Wirtschaft
Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
Positive Analysis of Policy Formulation and Implementation
Trade Policy; International Trade Organizations
- Subject
-
policy
protection
reform
tariffs
trade liberalization
- Event
-
Geistige Schöpfung
- (who)
-
Gang, Ira N.
- Event
-
Veröffentlichung
- (who)
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Rutgers University, Department of Economics
- (where)
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New Brunswick, NJ
- (when)
-
1994
- Handle
- Last update
-
10.03.2025, 11:43 AM CET
Data provider
This object is provided by:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Gang, Ira N.
- Rutgers University, Department of Economics
Time of origin
- 1994
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