Policy Reversals, Lobby Groups and Economic Distortions
AbstractThis paper aims to review the impact of the various tariff legislations passed from 1998 to 2003 on the structure of protection in the Philippines. The paper finds that while the overall level of effective protection has declined, it has remained uneven as some selected sectors have continued to receive relatively high effective rates of protection. As such, the economic distortions that characterize our tariff structure have continued to prevail and have led to the inefficient use of resources. The tariff structure continues to favor the manufacture of highly protected import substitutes at the expense of exportables. Oftentimes, the favored sectors are intermediate goods like sugar, petrochemicals, float glass, and steel which are inputs to a lot of products. Since the tariffs on the inputs are higher than the outputs, the cost of production has remained high affecting the competitiveness of the user sectors. The large disparities in tariff protection has provided incentives for lobbying. Thus, sustaining the trade reforms and encouraging competition to promote efficiency and consumer welfare has been very difficult.
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Bibliographic InfoPaper provided by East Asian Bureau of Economic Research in its series Trade Working Papers with number 22312.
Date of creation: Jan 2005
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effective protection; tariff structure; trade policy;
Other versions of this item:
- Aldaba, Rafaelita M., 2005. "Policy Reversals, Lobby Groups and Economic Distortions," Discussion Papers DP 2005-04, Philippine Institute for Development Studies.
- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
- O24 - Economic Development, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy
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