Quota Licenses for Imported Capital Equipment: Could Bureaucrats Ever DoBetter than the Market?
Despite valid criticisms, many developing countries have issued non-transferable import licenses to a limited number of final-good producers so as to restrict imports of an input capital equipment. This paper demonstrates that for a given import quota, such licensing restrictions can actually increase domestic production of both the input and the final product, but at the cost of reduced quota rents. Under pure competition, domestic welfare falls relative to the use of marketable quota licenses, but if foreigners would get the quota rents, or if external economies cause decreasing costs, then bureaucratic allocation can dominate.
|Date of creation:||Aug 1996|
|Date of revision:|
|Publication status:||published as Journal of International Economics, Vol. 43, nos. 1 & 2 (August 1997): 1-29.|
|Contact details of provider:|| Postal: |
Web page: http://www.nber.org
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Dani Rodrik, 1994. "Getting Interventions Right: How South Korea and Taiwan Grew Rich," NBER Working Papers 4964, National Bureau of Economic Research, Inc.
- Gopal J. Yadav, 1968. "A Note on the Equivalence of Tariffs and Quotas," Canadian Journal of Economics, Canadian Economics Association, vol. 1(1), pages 105-110, February.
- Krishna, K. & Tan, L.H., 1996.
"Transferable Licenses vs. Nontransferable Licences: What Is the Difference?,"
2-96-2, Pennsylvania State - Department of Economics.
- Kala Krishna & Ling Hui Tan, . "Transferable Licenses vs. Nontransferable Licences: What is the Difference?," EPRU Working Paper Series 96-02, Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics.
- Kala Krishna & Ling Hui Tan, 1996. "Transferable Licenses vs. Nontransferable Licenses: What is the Difference?," NBER Working Papers 5484, National Bureau of Economic Research, Inc.
- Robert C. Feenstra, 1992. "How Costly Is Protectionism?," Journal of Economic Perspectives, American Economic Association, vol. 6(3), pages 159-178, Summer.
- Krishna, Kala, 1990.
"The Case of the Vanishing Revenues: Auction Quotas with Monopoly,"
American Economic Review,
American Economic Association, vol. 80(4), pages 828-36, September.
- Kala Krishna, 1989. "The Case of the Vanishing Revenues: Auction Quotas with Monopoly," NBER Working Papers 2840, National Bureau of Economic Research, Inc.
- Trela, Irene & Whalley, John, 1995.
"Internal Quota-Allocation Schemes and the Costs of the MFA,"
Review of International Economics,
Wiley Blackwell, vol. 3(3), pages 284-306, October.
- Irene Trela & John Whalley, 1991. "Internal Quota Allocation Schemes and the Costs of the MFA," NBER Working Papers 3627, National Bureau of Economic Research, Inc.
- Jong-Wha Lee, 1994.
"Capital Goods Imports and Long-Run Growth,"
NBER Working Papers
4725, National Bureau of Economic Research, Inc.
- J. N. Bhagwati & V. K. Ramaswami & T. N. Srinivasan, 1968.
"Domestic Distortions, Tariffs and the Theory of Optimum Subsidy: Some Further Results,"
29, Massachusetts Institute of Technology (MIT), Department of Economics.
- Bhagwati, Jagdish N & Ramaswami, V K & Srinivasan, T N, 1969. "Domestic Distortions, Tariffs, and the Theory of Optimum Subsidy: Some Further Results," Journal of Political Economy, University of Chicago Press, vol. 77(6), pages 1005-10, Nov./Dec..
- Grossman, Gene M, 1981. "The Theory of Domestic Content Protection and Content Preference," The Quarterly Journal of Economics, MIT Press, vol. 96(4), pages 583-603, November.
- Anderson, James E., 1987. "Quotas as options: Optimality and quota license pricing under uncertainty," Journal of International Economics, Elsevier, vol. 23(1-2), pages 21-39, August.
- Vousden, Neil, 1987. "Content protection and tariffs under monopoly and competition," Journal of International Economics, Elsevier, vol. 23(3-4), pages 263-282, November.
When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:5695. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.