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Tari[ff]-tax reforms and market access

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  • Kreickemeier, Udo
  • Raimondos-Møller, Pascalis

Abstract

Reducing tari[ff]s and increasing consumption taxes is a standard IMF advice to countries that want to open up their economy without hurting government finances. Indeed, theoretical analysis of such a tari[ff]-tax reform shows an unambiguous increase in welfare and government revenues. The present paper examines whether the country that implements such a reform ends up opening up its markets to international trade, i.e. whether its market access improves. It is shown that this is not necessarily so. We also show that, comparing to the reform of only tari[ff]s, the tari[ff]-tax reform is a less efficient proposal to follow both as far as it concerns market access and welfare.

Suggested Citation

  • Kreickemeier, Udo & Raimondos-Møller, Pascalis, 2008. "Tari[ff]-tax reforms and market access," Journal of Development Economics, Elsevier, vol. 87(1), pages 85-91, August.
  • Handle: RePEc:eee:deveco:v:87:y:2008:i:1:p:85-91
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    Cited by:

    1. Jorge Martinez-Vazquez & Violeta Vulovic & Yongzheng Liu, 2011. "Direct versus Indirect Taxation: Trends, Theory, and Economic Significance," Chapters,in: The Elgar Guide to Tax Systems, chapter 2 Edward Elgar Publishing.
    2. Anderson, James E. & Neary, J. Peter, 2016. "Sufficient statistics for tariff reform when revenue matters," Journal of International Economics, Elsevier, vol. 98(C), pages 150-159.
    3. Broll, Udo & Kemnitz, Alexander & Mukherjee, Vivekananda, 2009. "Globalization and a welfare program for the marginalized," Dresden Discussion Paper Series in Economics 05/09, Technische Universität Dresden, Faculty of Business and Economics, Department of Economics.
    4. Raimondos-Møller, Pascalis & Woodland, Alan D., 2015. "Market access and welfare: Is there a conflict?," Economics Letters, Elsevier, vol. 126(C), pages 163-166.
    5. Giovanni Ganelli & Juha Tervala, 2015. "Tariff-tax Reforms in Large Economies," The World Economy, Wiley Blackwell, vol. 38(12), pages 1990-2012, December.
    6. Kenji Fujiwara, 2013. "A Win–Win–Win Tariff–Tax Reform under Imperfect Competition," Review of International Economics, Wiley Blackwell, vol. 21(5), pages 857-867, November.
    7. Ligthart, J.E. & van der Meijden, G.C., 2010. "Coordinated Tax-Tariff Reforms, Informality, and Welfare Distribution," Discussion Paper 2010-61, Tilburg University, Center for Economic Research.
    8. repec:eee:inecon:v:111:y:2018:i:c:p:134-142 is not listed on IDEAS
    9. Zou, Yuxiang & Chen, Tai-Liang, 2016. "International joint venture and welfare-improving tariff-tax reforms," International Review of Economics & Finance, Elsevier, vol. 46(C), pages 27-35.
    10. Michael Michael & Panos Hatzipanayotou, 2013. "Pollution and reforms of domestic and trade taxes towards uniformity," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 20(5), pages 753-768, October.
    11. Kenji Fujiwara & Ryoma Kitamura, 2012. "A Tariff-Tax Reform under Oligopoly and Free Entry," Discussion Paper Series 88, School of Economics, Kwansei Gakuin University, revised Apr 2012.

    More about this item

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General

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