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On Trade Policy Reform and the Missing Revenue: an Application to Mozambique

Author

Listed:
  • Channing Arndt

    (Purdue University)

  • Finn Tarp

    (Institute of Economics, University of Copenhagen)

Abstract

In many developing countries, large discrepancies exist between revenues implied by published tariff rates multiplied by estimated import volumes and actual receipts. We develop a stylized trade model where average and marginal tariff rates diverge and incorporate insights from this model into a computable general equilibrium model of Mozambique to study the implications of trade policy reform. Model simulations indicate that lowering tariff rates and reducing duty free importation in a manner that maintains official revenue benefits nearly everyone with the main exception being those, who benefited from duty free imports in the base.

Suggested Citation

  • Channing Arndt & Finn Tarp, 2004. "On Trade Policy Reform and the Missing Revenue: an Application to Mozambique," Discussion Papers 04-19, University of Copenhagen. Department of Economics.
    • Handle: RePEc:kud:kuiedp:0419
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    References listed on IDEAS

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    Cited by:

    1. Channing Arndt & Sherman Robinson & Finn Tarp, 2006. "Trade Reform and Gender in Mozambique," Nordic Journal of Political Economy, Nordic Journal of Political Economy, vol. 32, pages 73-89.
    2. Clemens Breisinger & Xinshen Diao & Rainer Schweickert & Manfred Wiebelt, 2010. "Managing Future Oil Revenues in Ghana: An Assessment of Alternative Allocation Options," African Development Review, African Development Bank, vol. 22(2), pages 303-315.
    3. Arndt, Channing, 2005. "The Doha Trade Round and Mozambique," Policy Research Working Paper Series 3717, The World Bank.

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    Keywords

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    JEL classification:

    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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