Political economy of tariff unification: the case of Russia
When designing a trade policy reform, government of a transition country faces the problem of minimizing both trade distortions and losses in tariff revenues. One possible solution of this problem is tariff unification, which undermines stimuli for tariff evasion and thus saves budget revenues. We use Grossman-Helpman (1994) model of tariff formation extended for the case of asymmetric information to analyze a political economy basis of tariff unification in Russia (2000-2001) and prospects of further tariff unification during the WTO accession process.
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