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Incidence theory and the shifting of protection across sectors: the South Asian experience

  • Priniti Panday
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    Using the theoretical framework of a simple general equilibrium model, this paper examines whether strategies aimed at protecting or promoting manufacturing industries indirectly taxed the agricultural and service sectors. A panel data set consisting of five South Asian countries over a 26 year time period is employed in the analysis. Three different estimation procedures are used to account for factors that are country specific and those that are common to all countries. The results indicate that the agricultural sector indirectly felt the brunt of the net protection provided to manufactures due to the 'shifting of protection' across sectors. The service sector, on the other hand, indirectly benefited from the general equilibrium spillover effects.

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    File URL: http://www.tandfonline.com/doi/abs/10.1080/0003684022000015892
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    Article provided by Taylor & Francis Journals in its journal Applied Economics.

    Volume (Year): 35 (2003)
    Issue (Month): 2 ()
    Pages: 125-132

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    Handle: RePEc:taf:applec:v:35:y:2003:i:2:p:125-132
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    1. Njinkeu, Dominique, 1996. "Evaluation of the incentive structure: A survey and application to Cameroon," World Development, Elsevier, vol. 24(3), pages 557-568, March.
    2. L.A. Sjaastad & K.W. Clements, 1981. "The Incidence of Protection: Theory and measurement," Economics Discussion / Working Papers 81-04, The University of Western Australia, Department of Economics.
    3. Andrew McKay & Chris Milner, 1997. "Measuring trade strategy in the presence of non-tradeables: Theory and some evidence for the Caribbean," Journal of Development Studies, Taylor & Francis Journals, vol. 33(5), pages 658-674.
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