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The Cost of Export Subsidies; Evidence From Costa Rica


  • Willy W. Hoffmaister


This paper develops a model to estimate the effects of export subsidies on the supply of exports. Using data for Costa Rica over the 1980’s, it is shown that while the export subsidy scheme in operation led to an increase in exports, the direct fiscal costs of the scheme were quite large. Furthermore, the subsidy scheme led to a significant increase of imports. These results suggest that elimination of export subsidies would not have a particularly harmful effect on the trade balance, and would increase the fiscal position and generate economic efficiency besides.

Suggested Citation

  • Willy W. Hoffmaister, 1991. "The Cost of Export Subsidies; Evidence From Costa Rica," IMF Working Papers 91/94, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:91/94

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    Cited by:

    1. Carmen M. Reinhart, 1995. "Devaluation, Relative Prices, and International Trade: Evidence from Developing Countries," IMF Staff Papers, Palgrave Macmillan, vol. 42(2), pages 290-312, June.
    2. José Roberto López, 1993. "Market efficiency, purchasing power parity and cointegration in Central American black foreing exchange markets," Estudios Económicos, El Colegio de México, Centro de Estudios Económicos, vol. 8(1), pages 111-153.
    3. Stanley, Denise L., 2003. "The Economic Impact of Mariculture on a Small Regional Economy," World Development, Elsevier, vol. 31(1), pages 191-210, January.
    4. -, 1997. "CEPAL Review no.62," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), August.
    5. Reinhart, Carmen, 1994. "Devaluation, Relative Prices, and International Trade," MPRA Paper 13708, University Library of Munich, Germany.
    6. Sacchidananda Mukherjee & Debashis Chakraborty & Julien Chaisse, 2014. "Influence of Subsidies on Exports empirical estimates,policy evidences and regulatory prospects," Working Papers 1422, Indian Institute of Foreign Trade.
    7. Shabbir, Safia & Iqbal, Javed & Hameed, Saima, 2013. "Risk Premium, Interest Rate Differential, and Subsidized Lending in Pakistan," MPRA Paper 48250, University Library of Munich, Germany.
    8. Helmers, Christian & Trofimenko, Natalia, 2009. "Export subsidies in a heterogeneous firms framework," Kiel Working Papers 1476, Kiel Institute for the World Economy (IfW).
    9. Doroodian, Khosrow & Boyd, Roy, 1995. "The Effectiveness of Export Promotion Policies in a General Equilibrium Framework: The Case of the Philippines," Philippine Journal of Development JPD 1995 Vol. XXII No. 2-, Philippine Institute for Development Studies.

    More about this item


    Exports; Costa Rica; subsidy; export subsidies; subsidies; export subsidy; exporters;

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F17 - International Economics - - Trade - - - Trade Forecasting and Simulation


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