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Revenue Tariff Reform

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  • Anderson, James E
  • Neary, J Peter

Abstract

What kind of tariff reform is likely to raise welfare in situations where tariff revenue is important? Uncertainty about specification and risk from imprecise parameter estimates of any particular specification reduce the credibility of simulation estimates. A promising alternative is to develop rules which are robust with respect to such uncertainty. We present sufficient conditions for a class of linear rules that guarantee welfare-improving tariff reform. The rules span cones of welfare-improving tariff reforms consisting of convex combinations of (i) trade-weighted-average-tariff-preserving dispersion cuts; and (ii) uniform tariff cuts that preserve domestic relative prices among tariff-ridden goods.

Suggested Citation

  • Anderson, James E & Neary, J Peter, 2014. "Revenue Tariff Reform," CEPR Discussion Papers 9838, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:9838
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    More about this item

    Keywords

    Generalized mean and variance of tariffs; Piecemeal policy reform; Tariff revenue; Trade policy reform;
    All these keywords.

    JEL classification:

    • F1 - International Economics - - Trade
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation

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