During the 1980s the Bank aggressively promoted greater uniformity in tariffs in developing countries. The Bank's structural adjustment and trade reform programs have often recommended abolition of quantitative import restrictions and increased uniformity in tariffs. This report is a formal analysis of some political economy arguments for uniform tariffs. The authors present three models in which unifrom tariff rules may be adopted as a way of minimizing the welfare costs of endogenously determined tariffs. In the first two models, tariffs are demand determined : the government is essentially unable to resist the lobbying pressure. In the third model, tariffs are supply determined in the sense that they result from the government's preference for certain sectors over others. After examining the three models, the authors conclude that in each case it is possible for a uniform tariff regime to yield higher welfare than a regime in which tariffs can diverge across sectors.
Details
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Author
Panagariya, Arvind Rodrik, Dani
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Document Date
1991/05/31
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Document Type
Policy Research Working Paper
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Report Number
WPS681
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Volume No
1
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Total Volume(s)
1
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Disclosure Date
2010/07/01
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Doc Name
Political economy arguments for uniform tariffs
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Keywords
Models; Tariffs; International trade; Exports
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Citation
Panagariya, Arvind Rodrik, Dani
Political economy arguments for uniform tariffs (English). Policy, Research, and External Affairs working papers ; no. WPS 681. Trade policy Washington, D.C. : World Bank Group. http://documents.worldbank.org/curated/en/293511468764367848/Political-economy-arguments-for-uniform-tariffs