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The Case Against Tariff Compensation

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  • Peter G. Warr

Abstract

Should lightly protected industries be given tariff compensation? Reasonable people can and do differ on this issue; neither the case supporting tariff compensation nor that opposing it is fully conclusive. Nevertheless, it is the purpose of this paper to argue that, on balance, the stronger argument is on the negative side. It is argued that economists in particular should focus their limited influence on recommending tariff reductions rather than tariff compensation, but that even if this fails they should be most reluctant to recommend tariff compensation. The potential benefits from tariff compensation are small relative to the gains from tariff reduction but the informational problems of tariff compensation are such as to make even these small potential benefits unlikely in practice.
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Suggested Citation

  • Peter G. Warr, 1978. "The Case Against Tariff Compensation," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 22(2-3), pages 85-98, 08-12.
  • Handle: RePEc:bla:ajarec:v:22:y:1978:i:2-3:p:85-98
    DOI: j.1467-8489.1978.tb00209.x
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    References listed on IDEAS

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    1. Warr, Peter G, 1977. "Shadow Pricing with Policy Constraints," The Economic Record, The Economic Society of Australia, vol. 53(142&143), pages 149-166, June-Sept.
    2. Richard E. Caves, 1976. "Economic Models of Political Choice: Canada's Tariff Structure," Canadian Journal of Economics, Canadian Economics Association, vol. 9(2), pages 278-300, May.
    3. Kym Anderson, 1978. "On Why Rates Of Assistance Differ Between Australia'S Rural Industries," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 22(2-3), pages 99-114, 08-12.
    4. Warr, Peter G, 1979. "Tariff Compensation without Omniscience," The Economic Record, The Economic Society of Australia, vol. 55(148), pages 20-32, March.
    5. Lloyd, Peter J., 1975. "Tariff Compensation: An Undesirable Policy," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 19(03), December.
    6. Warr, Peter G, 1977. "Tariff Compensation via Input Subsidies," The Economic Record, The Economic Society of Australia, vol. 53(144), pages 508-516, December.
    7. Harris, Stuart, 1975. "Tariff Compensation: Sufficient Justification For Assistance To Australian Agriculture?," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 19(03), December.
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    Cited by:

    1. Gerritsen, Rolf & Abbott, Jacky, 1990. "Again The Lucky Country?: Australian Rural Policy in 1988 and 1989," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 58(01), April.
    2. Kym Anderson & Peter Lloyd & Donald Maclaren, 2007. "Distortions to Agricultural Incentives in Australia Since World War II," The Economic Record, The Economic Society of Australia, vol. 83(263), pages 461-482, December.
    3. Fisher, Brian S., 1985. "Frontiers in Agricultural Policy Research," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 53(02), August.
    4. Peter Lloyd & Peter Lloyd, 2013. "Relative Assistance to Agriculture and Manufacturing since Federation," Department of Economics - Working Papers Series 1173, The University of Melbourne.
    5. Jarrett, Frank G. & McColl, James C., 1984. "Comments On The Balderstone Report: Reply," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 28(01), April.
    6. William J. Martin, 1990. "Public Choice Theory And Australian Agricultural Policy Reform," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 34(3), pages 189-211, December.
    7. Davidson, Bruce Robinson, 1992. "Rum Corps to IXL: Services to Pastoralists and Farmers in New South Wales, Part IV 1930-1990: Depression, War and Peace," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 60(03), December.
    8. Anderson, Kym & de Nicola, Francesca & Jara, Esteban & Kurzweil, Marianne & Sandri, Damiano & Valenzuela, Ernesto, 2007. "Distortions in farmer prices since 1950s: South Africa in international perspective," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 46(4), December.
    9. Anderson, Kym, 2003. "Impact assessment of IFPRI's research and related activities based on economywide modeling," Impact assessments 21, International Food Policy Research Institute (IFPRI).

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