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The (Normative) Efficiency Ranking of Output and Export Subsidies under Costly and Imperfect Enforcement

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  • Giannakas, Konstantinos

Abstract

This paper relaxes the assumption of perfect and costless policy enforcement implicit in traditional analysis of output and export subsidies and introduces enforcement costs and cheating into the economic analysis of these policy instruments. Analytical results show that compliance with policy rules is not the natural outcome of self-interest and complete deterrence of cheating is not economically efficient. The introduction of enforcement costs and cheating changes the welfare effects of the policy mechanisms, their efficiency in redistributing income to producers, and their normative ranking in terms of transfer efficiency.

Suggested Citation

  • Giannakas, Konstantinos, 2000. "The (Normative) Efficiency Ranking of Output and Export Subsidies under Costly and Imperfect Enforcement," 2000 Conference (44th), January 23-25, 2000, Sydney, Australia 123651, Australian Agricultural and Resource Economics Society.
    • Handle: RePEc:ags:aare00:123651
    DOI: 10.22004/ag.econ.123651
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    1. Konstantinos Giannakas, 2003. "Economics of export subsidies under costly and imperfect enforcement," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 47(4), pages 541-562, December.
    2. Julian M. Alston & Brian H. Hurd, 1990. "Some Neglected Social Costs of Government Spending in Farm Programs," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 72(1), pages 149-156.
    3. Konstantinos Giannakas & Murray Fulton, 2000. "Efficient Redistribution Using Quotas and Subsidies in the Presence of Misrepresentation and Cheating," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(2), pages 347-359.
    4. Frank A. Cowell, 1990. "Cheating the Government: The Economics of Evasion," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262532484, December.
    5. Julian M. Alston & Colin A. Carter & Vincent H. Smith, 1995. "Rationalizing Agricultural Export Subsidies: Reply," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 77(1), pages 209-213.
    6. Bruce Gardner, 1983. "Efficient Redistribution through Commodity Markets," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 65(2), pages 225-234.
    7. Bruce L. Gardner, 1995. "Rationalizing Agricultural Export Subsidies: Comment," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 77(1), pages 205-208.
    8. Charles L. Ballard & Don Fullerton, 1992. "Distortionary Taxes and the Provision of Public Goods," Journal of Economic Perspectives, American Economic Association, vol. 6(3), pages 117-131, Summer.
    9. Giannakas, Konstantinos & Fulton, Murray, 2000. "The economics of coupled farm subsidies under costly and imperfect enforcement," Agricultural Economics, Blackwell, vol. 22(1), pages 75-90, January.
    10. Lea,Stephen E. G. & Tarpy,Roger M. & Webley,Paul M., 1987. "The Individual in the Economy," Cambridge Books, Cambridge University Press, number 9780521317016.
    11. Julian M. Alston & Colin A. Carter & Vincent H. Smith, 1993. "Rationalizing Agricultural Export Subsidies," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 75(4), pages 1000-1009.
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