Trade reform in a corrupt economy : A note
We construct a general equilibrium model and analyze the effectiveness of trade reform in a distorted economy where distortion exists in form of bureaucratic corruption that arises because of trade protection at the border. In this kleptocratic set up, intermediaries are employed in order to run off from paying a part of import tariff. We use HOSV kind of framework to prove that whether trade liberalization necessarily helps reducing corruption activities and to check what happens to the production of commodities.
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- James E. Anderson & Eric van Wincoop, 2001.
"Borders, Trade and Welfare,"
Boston College Working Papers in Economics
508, Boston College Department of Economics.
- Krueger, Anne O, 1998. "Why Trade Liberalisation Is Good for Growth," Economic Journal, Royal Economic Society, vol. 108(450), pages 1513-22, September.
- Jones, R.W. & Marjit, S., 1992. "International Trade and Endogenous Production Structures," RCER Working Papers 312, University of Rochester - Center for Economic Research (RCER).
- Greenaway, David & Morgan, Wyn & Wright, Peter W, 1998. "Trade Reform, Adjustment and Growth: What Does the Evidence Tell Us?," Economic Journal, Royal Economic Society, vol. 108(450), pages 1547-61, September.
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