IDEAS home Printed from https://ideas.repec.org/p/boc/bocoec/308.html
   My bibliography  Save this paper

Effective Protection Redux

Author

Listed:
  • James Anderson

    (Boston College)

Abstract

This paper rehabilitates effective protection. In general equilibrium, the usual definition (the percentage change in value added per unit induced by the tariff structure) corresponds to no economically interesting magnitude. The effective rate of protection for sector j is defined here as the uniform tariff which is equivalent to the actual differentiated tariff structure in its effect on the rents to residual claimants in sector j. This definition applies to general as well as partial equilibrium economic structures, has obvious relevance for political economy models and seems to correspond to the motivation for the early effective protection literature. Like the earlier effective rate formula, the concept is operational using the widely available set of Computable General Equilibrium (CGE) models. An example is provided for the US economy. The numerical results for the old and new concepts are not significantly correlated.

Suggested Citation

  • James Anderson, 1995. "Effective Protection Redux," Boston College Working Papers in Economics 308., Boston College Department of Economics.
  • Handle: RePEc:boc:bocoec:308
    as

    Download full text from publisher

    File URL: http://fmwww.bc.edu/EC-P/wp308.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Robinson, Sherman & Kilkenny, Maureen & Hanson, Kenneth, 1990. "The USDA/ERS Computable General Equilibrium (CGE) Model of the United States," Staff Reports 278341, United States Department of Agriculture, Economic Research Service.
    2. Grossman, Gene M & Helpman, Elhanan, 1994. "Protection for Sale," American Economic Review, American Economic Association, vol. 84(4), pages 833-850, September.
    3. Wilfred J. Ethier, 1977. "The Theory of Effective Protection in General Equilibrium: Effective-Rate Analogues of Nominal Rates," Canadian Journal of Economics, Canadian Economics Association, vol. 10(2), pages 233-245, May.
    4. Deaton,Angus & Muellbauer,John, 1980. "Economics and Consumer Behavior," Cambridge Books, Cambridge University Press, number 9780521296762.
    5. Anderson, James & Naya, Seiji, 1969. "Substitution and Two Concepts of Effective Rate of Protection," American Economic Review, American Economic Association, vol. 59(4), pages 607-612, Part I Se.
    6. Anderson, James E & Bannister, Geoffrey J & Neary, J Peter, 1995. "Domestic Distortions and International Trade," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 36(1), pages 139-157, February.
    7. W. M. Corden, 1966. "The Structure of a Tariff System and the Effective Protective Rate," Journal of Political Economy, University of Chicago Press, vol. 74, pages 221-221.
    8. Tan, Augustine H H, 1970. "Differential Tariffs, Negative Value-Added and the Theory of Effective Protection," American Economic Review, American Economic Association, vol. 60(1), pages 107-116, March.
    9. J. P. Neary (ed.), 1995. "International Trade," Books, Edward Elgar Publishing, volume 0, number 575.
    10. Jones, Ronald W., 1975. "Income distribution and effective protection in a multicommodity trade model," Journal of Economic Theory, Elsevier, vol. 11(1), pages 1-15, August.
    11. Kohler, W.K., 1991. "Income Distribution and Labor Market Efects of Australian Pre- and Post- Tokyo Round Tariff Protection," Working Papers 279, Research Seminar in International Economics, University of Michigan.
    12. Kohler, Wilhelm, 1991. "Income distribution and labor market effects of Austrian pre- and post-Tokyo-round tariff protection," European Economic Review, Elsevier, vol. 35(1), pages 139-154, January.
    13. Angus Deaton, 1979. "The Distance Function in Consumer Behaviour with Applications to Index Numbers and Optimal Taxation," Review of Economic Studies, Oxford University Press, vol. 46(3), pages 391-405.
    14. 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.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ronald Fischer, "undated". "Trade liberalization in Latin America: The case of Chile," Documentos de Trabajo 190, Centro de Economía Aplicada, Universidad de Chile.
    2. Sorin BURNETE, 2017. "Outsourcing under Threat: Estimated Impact of Potential Tariffs on US Imports from Mexico," Expert Journal of Economics, Sprint Investify, vol. 5(3), pages 88-97.
    3. Evans, Lewis & Richardson, Martin, 2002. "Trade Reform in New Zealand: Unilateralism at Work," Working Paper Series 3934, Victoria University of Wellington, The New Zealand Institute for the Study of Competition and Regulation.
    4. kishore gawande & pravin krishna, 2005. "The Political Economy of Trade Policy: Empirical Approaches," International Trade 0503003, University Library of Munich, Germany.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Anderson, James E., 1998. "Effective protection redux1," Journal of International Economics, Elsevier, vol. 44(1), pages 21-44, February.
    2. Antoine Bouët, 2000. "La mesure des protections commerciales nationales," Working Papers 2000-15, CEPII research center.
    3. Echavarría, Juan José & Giraldo, Iader & Jaramillo, Fernando, 2019. "Cadenas globales de valor, crecimiento y protección arancelaria en Colombia," Working papers 9, Red Investigadores de Economía.
    4. David Greenaway & Chris Milner, 2003. "Effective Protection, Policy Appraisal and Trade Policy Reform," The World Economy, Wiley Blackwell, vol. 26(4), pages 441-456, April.
    5. Maria Cipollina & Luca Salvatici, 2008. "Measuring Protection: Mission Impossible?," Journal of Economic Surveys, Wiley Blackwell, vol. 22(3), pages 577-616, July.
    6. J. Peter Neary, 2001. "International trade : Commercial policy," Working Papers 200123, School of Economics, University College Dublin.
    7. Chavas, Jean-Paul, 2013. "On Demand Analysis and Dynamics: A Benefit Function Approach," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 149683, Agricultural and Applied Economics Association.
    8. M. Fleurbaey., 2012. "Beyond GDP: The Quest for a Measure of Social Welfare," VOPROSY ECONOMIKI, N.P. Redaktsiya zhurnala "Voprosy Economiki", vol. 2.
    9. DECANCQ Koen & OLIVERA Javier & SCHOKKAERT Erik, 2018. "Program evaluation and ethnic differences: the Pension 65 program in Peru," LISER Working Paper Series 2018-21, Luxembourg Institute of Socio-Economic Research (LISER).
    10. Feeney, JoAnne & Hillman, Arye L., 1995. "Asset markets and individual trade policy preferences," Discussion Papers, Series II 282, University of Konstanz, Collaborative Research Centre (SFB) 178 "Internationalization of the Economy".
    11. Susanne Fuchs-Seliger, 2016. "Axiomatic Models of Rational Behavior and Interpretations," Homo Oeconomicus: Journal of Behavioral and Institutional Economics, Springer, vol. 33(4), pages 385-401, December.
    12. Bagwell, Kyle & Staiger, Robert W., 2001. "Reciprocity, non-discrimination and preferential agreements in the multilateral trading system," European Journal of Political Economy, Elsevier, vol. 17(2), pages 281-325, June.
    13. Fernandes, Ana M., 2007. "Trade policy, trade volumes and plant-level productivity in Colombian manufacturing industries," Journal of International Economics, Elsevier, vol. 71(1), pages 52-71, March.
    14. Anderson, Gordon & Crawford, Ian & Leicester, Andrew, 2011. "Welfare rankings from multivariate data, a nonparametric approach," Journal of Public Economics, Elsevier, vol. 95(3), pages 247-252.
    15. Pope, Rulon D., 1982. "To Dual Or Not To Dual?," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 7(2), pages 1-16, December.
    16. Koen Decancq & Marc Fleurbaey & François Maniquet, 2019. "Multidimensional poverty measurement with individual preferences," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 17(1), pages 29-49, March.
    17. Edward E. Schlee & M. Ali Khan, 2022. "Money Metrics In Applied Welfare Analysis: A Saddlepoint Rehabilitation," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 63(1), pages 189-210, February.
    18. Bagwell,K. & Staiger,R.W., 1999. "Multilateral trade negotiations, bilateral opportunism and the rules of GATT," Working papers 6, Wisconsin Madison - Social Systems.
    19. Pao-Li Chang, 2002. "Endogenous Tariff Formation with Intra-Industry Trade," Working Papers 476, Research Seminar in International Economics, University of Michigan.
    20. Robert W. Staiger & Kyle Bagwell, 1999. "An Economic Theory of GATT," American Economic Review, American Economic Association, vol. 89(1), pages 215-248, March.

    More about this item

    Keywords

    effective protection; distance function;

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:boc:bocoec:308. 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: . General contact details of provider: https://edirc.repec.org/data/debocus.html .

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Christopher F Baum (email available below). General contact details of provider: https://edirc.repec.org/data/debocus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.