Fiscal Constraints, Collection Costs, And Trade Policies
The last two decades witnessed trade liberalization in many developing countries. What caused this trend, and why have trade barriers been so ubiquitous when economic theory overwhelmingly supports free trade? This paper proposes that governments' revenue needs are the driving force. Governments may rely disproportionately on trade taxes because they are inexpensive to collect. Trade liberalization is an integral part of a tax reform: a tax base expansion is necessary to allow governments to reduce tariff rates. This hypothesis is supported by a panel data analysis of 27 developing countries. Copyright Blackwell Publishing Ltd 2005.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 17 (2005)
Issue (Month): (03)
|Contact details of provider:|| Web page: http://www.blackwellpublishing.com/journal.asp?ref=0954-1985|
|Order Information:||Web: http://www.blackwellpublishing.com/subs.asp?ref=0954-1985|
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.:
- McLaren, John, 1998. "Black Markets and Optimal Evadable Taxation," Economic Journal, Royal Economic Society, vol. 108(448), pages 665-679, May.
- Pritchett, Lant & Sethi, Geeta, 1994.
"Tariff Rates, Tariff Revenue, and Tariff Reform: Some New Facts,"
World Bank Economic Review,
World Bank Group, vol. 8(1), pages 1-16, January.
- Pritchett, Lant & Sethi, Geeta, 1993. "Tariff rates, tariff revenue, and tariff reform : some new facts," Policy Research Working Paper Series 1143, The World Bank.
- James E. Anderson, 1996. "Trade Reform with a Government Budget Constraint," NBER Working Papers 5827, National Bureau of Economic Research, Inc.
- James E. Anderson, 1997. "Trade Reform with a Government Budget Constraint," Boston College Working Papers in Economics 348., Boston College Department of Economics.
- Fernandez, Raquel & Rodrik, Dani, 1991. "Resistance to Reform: Status Quo Bias in the Presence of Individual-Specific Uncertainty," American Economic Review, American Economic Association, vol. 81(5), pages 1146-1155, December.
- Dani Rodrik, 1996. "Understanding Economic Policy Reform," Journal of Economic Literature, American Economic Association, vol. 34(1), pages 9-41, March.
- Abe, Kenzo, 1995. "The Target Rates of Tariff and Tax Reform," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 36(4), pages 875-885, November.
- Heady, Christopher J. & Mitra, Pradeep K., 1987. "Distributional and revenue raising arguments for tariffs," Journal of Development Economics, Elsevier, vol. 26(1), pages 77-101, June.
- Clarete, Ramon L. & Whalley, John, 1987. "Comparing the marginal welfare costs of commodity and trade taxes," Journal of Public Economics, Elsevier, vol. 33(3), pages 357-362, August.
- Sandmo, Agnar, 1976. "Optimal taxation : An introduction to the literature," Journal of Public Economics, Elsevier, vol. 6(1-2), pages 37-54.
- Cassing, James H. & Hillman, Arye L., 1985. "Political influence motives and the choice between tariffs and quotas," Journal of International Economics, Elsevier, vol. 19(3-4), pages 279-290, November.
- Baack, Bennett D. & Ray, Edward John, 1983. "The political economy of tariff policy: A case study of the United States," Explorations in Economic History, Elsevier, vol. 20(1), pages 73-93, January.
- Cukierman, Alex & Edwards, Sebastian & Tabellini, Guido, 1992. "Seigniorage and Political Instability," American Economic Review, American Economic Association, vol. 82(3), pages 537-555, June.
- Alex Cukierman & Sebastian Edwards & Guido Tabellini, 1989. "Seigniorage and Political Instability," NBER Working Papers 3199, National Bureau of Economic Research, Inc.
- Yitzhaki, Shlomo, 1979. "A Note on Optimal Taxation and Administrative Costs," American Economic Review, American Economic Association, vol. 69(3), pages 475-480, June.
- Dixit, Avinash, 1985. "Tax policy in open economies," Handbook of Public Economics, in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 1, chapter 6, pages 313-374 Elsevier.
- Peter A. Diamond & J. A. Mirrlees, 1968. "Optimal Taxation and Public Production," Working papers 22, Massachusetts Institute of Technology (MIT), Department of Economics.
- Mitra, Pradeep, 1992. "The Coordinated Reform of Tariffs and Indirect Taxes," World Bank Research Observer, World Bank Group, vol. 7(2), pages 195-218, July.
- Julio A. Santaella, 1996. "Stylized Facts before IMF-Supported Macroeconomic Adjustment," IMF Staff Papers, Palgrave Macmillan, vol. 43(3), pages 502-544, September.
- Jay Pil Choi, 1996. "A Rationale for Quota Protection: A Political Economy Approach," Eastern Economic Journal, Eastern Economic Association, vol. 22(4), pages 421-424, Fall.
- Currie, Janet & Harrison, Ann E, 1997. "Sharing the Costs: The Impact of Trade Reform on Capital and Labor in Morocco," Journal of Labor Economics, University of Chicago Press, vol. 15(3), pages 44-71, July. Full references (including those not matched with items on IDEAS)