Tariff Structure In A Small Open Economy: A Theoretical Analysis
AbstractDeveloping countries have been facing substantial adjustment costs in their endeavor in implementing trade reform. To lessen the adjustment costs of trade reform and to diffuse political support for protection a uniform tariff policy has often been recommended. The present paper examines the efficacy of this policy in terms of a 3„e4 specific factor full-employment structure reasonable for a developing economy. It shows that whether a symmetric tariff structure would be able to protect all the import-competing sectors crucially depends on the economy¡¦s trade pattern. The paper is then extended to include Harris-Todaro type unemployment of unskilled labour. In this framework also the implications of the uniform tariffs and then welfare effects of tariffs on one sector have been studied. Finally, the consequences of tariffs on urban unemployment of unskilled labour have been examined.
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Bibliographic InfoPaper provided by EconWPA in its series International Trade with number 0511006.
Length: 21 pages
Date of creation: 09 Nov 2005
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Full-employment; specific factor; uniform tariffs; Hechscher- Ohlin subsystem; skilled labour; unskilled labour; urban unemployment;
Find related papers by JEL classification:
- F2 - International Economics - - International Factor Movements and International Business
- O10 - Economic Development, Technological Change, and Growth - - Economic Development - - - General
- O41 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
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