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Domestic purchase requirements for import license allocations in Mali

Author

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  • Takacs, Wendy E.

Abstract

This paper investigates the incentive system facing importers under a linking arrangement and their likely behavior. It analyzes the impact on imports, consumption, and domestic production and the social costs under the assumption that all the relevant"industries"(production of the product in the domestic market, importing and distribution) are competitive, in the sense that there are a large number of firms involved and nothing deters new firms from entering the market. It focuses on the interaction of the linking arrangement with price controls, because the products in question also have been subject to this additional regulation. The overlapping regulations pose problems of timing in the liberalization process. The paper also investigates the operation of the linking arrangements when domestic production is monopolized. The conclusion is that the ranking of the policy instruments as a means of obtaining certain objectives may switch if the domestic industry is not competitive.

Suggested Citation

  • Takacs, Wendy E., 1991. "Domestic purchase requirements for import license allocations in Mali," Policy Research Working Paper Series 569, The World Bank.
  • Handle: RePEc:wbk:wbrwps:569
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    References listed on IDEAS

    as
    1. Bark, Taeho & de Melo, Jaime, 1988. "Export Quota Allocations, Export Earnings, and Market Diversification," World Bank Economic Review, World Bank Group, vol. 2(3), pages 341-348, September.
    2. McCulloch, Rachel & Johnson, Harry G, 1973. "A Note on Proportionally Distributed Quotas," American Economic Review, American Economic Association, vol. 63(4), pages 726-732, September.
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