Economics of export subsidies under costly and imperfect enforcement
The present paper builds on the published literature on agricultural policy analysis under costly and imperfect enforcement by introducing enforcement costs and misrepresentation into the economic analysis of export subsidies. Specifically, the present paper examines the economic causes of cheating on export subsidies and the consequences of enforcement costs and misrepresentation for the welfare effects and the transfer efficiency of this policy instrument. Policy design and implementation is modelled as a sequential game between a government that designs and enforces the policy and the recipients of the payments. Two alternative policy implementation scenarios are considered. In the first scenario, export subsidies are paid to private trading firms while in the second scenario subsidies are paid directly to the producers of the subsidised commodity. Analytical results show that the introduction of enforcement costs and cheating changes the welfare effects of export subsidies and their efficiency in redistributing income to producers. The analysis also shows that, contrary to what is traditionally believed, the incidence of export subsidies depends on the group that is subsidised to export the surplus quantity – the way the policy is implemented. The results provide additional support for the contention that the economic consequences of cheating are highly policy-specific. Finally, the analysis reveals that when the government faces restrictions on either the volume or the value of export subsidies, cheating reduces the distortionary effects of the policy on international markets. This is true irrespective of whether subsidies are paid to trading firms or to producers.
Volume (Year): 47 (2003)
Issue (Month): 4 (December)
|Contact details of provider:|| Postal: |
Phone: 0409 032 338
Web page: http://www.aares.info
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- James A. Brander & Barbara J. Spencer, 1984.
"Export Subsidies and International Market Share Rivalry,"
NBER Working Papers
1464, National Bureau of Economic Research, Inc.
- Brander, James A. & Spencer, Barbara J., 1985. "Export subsidies and international market share rivalry," Journal of International Economics, Elsevier, vol. 18(1-2), pages 83-100, February.
- Itoh, Motoshige & Kiyono, Kazuharu, 1987. "Welfare-Enhancing Export Subsidies," Journal of Political Economy, University of Chicago Press, vol. 95(1), pages 115-37, February.
- 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.
- 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.
- Giannakas, Konstantinos & Fulton, Murray, 2000. "The economics of coupled farm subsidies under costly and imperfect enforcement," Agricultural Economics of Agricultural Economists, International Association of Agricultural Economists, vol. 22(1), January.
- Frank A. Cowell, 1990. "Cheating the Government: The Economics of Evasion," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262532484, June.
When requesting a correction, please mention this item's handle: RePEc:ags:aareaj:118164. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.