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Revenue Tariff Reform

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  • Peter Neary
  • James E. Anderson

Abstract

What kind of tariff reform is likely to raise welfare in situations where tariff revenue is important? Uncertainty about specification and risk from imprecise parameter estimates of any particular specification reduce the credibility of simulation estimates. A promising alternative is to develop rules which are robust with respect to such uncertainty. We present sufficient conditions for a class of linear rule that guarantee welfare-improving tariff reform. The rules span cones of welfare-improving tariff reforms consisting of convex combinations of (i) trade-weighted-average-tariff-preserving dispersion cuts; and (ii) uniform tariff cuts that preserve domestic relative prices among tariff-ridden goods.

Suggested Citation

  • Peter Neary & James E. Anderson, 2013. "Revenue Tariff Reform," Economics Series Working Papers 688, University of Oxford, Department of Economics.
    • Handle: RePEc:oxf:wpaper:688
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    References listed on IDEAS

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    More about this item

    Keywords

    Trade policy reform; Generalized mean and variance of tariffs; Tariff revenue; Piecemeal policy reform;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation

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