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Squeezing the state: tariff revenue, state capacity and the WTO’s Doha Round

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  • James Scott

Abstract

Abstract Tax revenue forms a critical element of state capacity, in turn underpinning the state’s ability to foster inclusive economic growth. This paper calculates the impact of the WTO’s Doha Round on tariff revenues among low-income countries. It finds that some, though not all, are severely affected, losing up to 17 percent of total government tax revenue. In addition, the tariff cuts are found to be regressive, primarily affecting luxury items, such as motor vehicles. Finally, the paper analyses the effectiveness of the mechanism included in the Doha Round to overcome lost tariff revenue, namely aid for trade.

Suggested Citation

  • James Scott, 2012. "Squeezing the state: tariff revenue, state capacity and the WTO’s Doha Round," Global Development Institute Working Paper Series 16912, GDI, The University of Manchester.
  • Handle: RePEc:bwp:bwppap:16912
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    File URL: http://hummedia.manchester.ac.uk/institutes/gdi/publications/workingpapers/bwpi/bwpi-wp-16912.pdf
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    References listed on IDEAS

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    1. Emran, M. Shahe & Stiglitz, Joseph E., 2005. "On selective indirect tax reform in developing countries," Journal of Public Economics, Elsevier, vol. 89(4), pages 599-623, April.
    2. Przemyslaw Kowalski, 2005. "Impact of Changes in Tariffs on Developing Countries' Government Revenue," OECD Trade Policy Papers 18, OECD Publishing.
    3. Will Martin & Kym Anderson, 2006. "Agricultural Trade Reform and the Doha Development Agenda," World Bank Publications, The World Bank, number 6889.
    4. Kym Anderson & Will Martin & Dominique van der Mensbrugghe, 2006. "Doha Merchandise Trade Reform: What Is at Stake for Developing Countries?," World Bank Economic Review, World Bank Group, vol. 20(2), pages 169-195.
    5. Frank Ackerman & Kevin Gallagher, 2008. "The Shrinking Gains from Global Trade Liberalization in Computable General Equilibrium Models: A Critical Assessment," International Journal of Political Economy, Taylor & Francis Journals, vol. 37(1), pages 50-77.
    6. Alice Sindzingre, 2007. "Financing the Developmental State: Tax and Revenue Issues," Development Policy Review, Overseas Development Institute, vol. 25(5), pages 615-632, September.
    7. Thomas W. Hertel & L. Alan Winters, 2006. "Poverty and the WTO : Impacts of the Doha Development Agenda," World Bank Publications, The World Bank, number 7411.
    8. Bresser Pereira,Luiz Carlos, 2010. "Globalization and Competition," Cambridge Books, Cambridge University Press, number 9780521196352, March.
    9. Tehmina S. Khan & John Norregaard, 2007. "Tax Policy; Recent Trends and Coming Challenges," IMF Working Papers 07/274, International Monetary Fund.
    10. Keen, Michael & Ligthart, Jenny E., 2002. "Coordinating tariff reduction and domestic tax reform," Journal of International Economics, Elsevier, vol. 56(2), pages 489-507, March.
    11. Mark Langan & James Scott, 2011. "The false promise of Aid for Trade," Global Development Institute Working Paper Series 16011, GDI, The University of Manchester.
    12. Sebastian Hess & Stephan von Cramon-Taubadel, 2008. "A Meta-Analysis of General and Partial Equilibrium Simulations of Trade Liberalisation under the Doha Development Agenda," The World Economy, Wiley Blackwell, vol. 31(6), pages 804-840, June.
    13. Ernesto Valenzuela & Kym Anderson & Thomas Hertel, 2008. "Impacts of trade reform: sensitivity of model results to key assumptions," International Economics and Economic Policy, Springer, vol. 4(4), pages 395-420, February.
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