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Export Tax and Pricing Power; Two Hypotheses on the Cocoa Market in Côte d’Ivoire

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  • Alexei P Kireyev

Abstract

The paper models export taxation of a primary commodity in a large country under two hypotheses about the structure of its export market. The first is perfect competition among exporters, where there is an indefinite number of buyers of the local product and at least a partial pass-through of international prices to local producers. The second is an oligopsony, a market structure in some low-income countries where numerous scattered local producers face a few powerful exporters that can influence domestic prices. For both hypotheses, export taxation can be justified on efficiency grounds only for the country that adopts the tax. Designed correctly, a low export tax may be welfare-enhancing for that country but will always be welfare-reducing for its trading partners. The models of export taxation for both hypotheses are calibrated for the illustrative case of cocoa exports from Côte d’Ivoire.

Suggested Citation

  • Alexei P Kireyev, 2010. "Export Tax and Pricing Power; Two Hypotheses on the Cocoa Market in Côte d’Ivoire," IMF Working Papers 10/269, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:10/269
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    References listed on IDEAS

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    1. Yilmaz, Kamil, 1999. "Optimal export taxes in a multicountry framework," Journal of Development Economics, Elsevier, vol. 60(2), pages 439-465, December.
    2. Bandyopadhyay, Subhayu, 1996. "Growth, welfare and optimal trade taxes: a fallacy of composition," Journal of Development Economics, Elsevier, vol. 50(2), pages 369-380, August.
    3. Vincenzo Denicolo & Massimo Matteuzzi, 2000. "Specific and Ad Valorem Taxation in Asymmetric Cournot Oligopolies," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 7(3), pages 335-342, May.
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    Cited by:

    1. Olga Solleder, 2013. "Panel Export Taxes (PET) Dataset: New Data on Export Tax Rates," IHEID Working Papers 07-2013, Economics Section, The Graduate Institute of International Studies.
    2. Souleymane Soumahoro, 2014. "Export Taxes and Consumption: A ‘Natural Experiment’ from Côte d'Ivoire," HiCN Working Papers 182, Households in Conflict Network.
    3. Olga Solleder, 2013. "Trade Effects of Export Taxes," IHEID Working Papers 08-2013, Economics Section, The Graduate Institute of International Studies.

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