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Political and Public Finance Motives for Tariffs

  • Michael E. S. Hoffman

    (U.S. Government Accountability Office)

Governments face many constraints when making taxation decisions, including revenue needs, political objectives, and administrative capacities. Tariffs have an appealing combination of features for politicians: they provide a stream of revenue that is easy to collect, as well as satisfying political objectives in import-competing industries. This paper describes the tax structure governments choose when they are not purely benevolent. In the model the government must finance a stream of public expenditures while simultaneously seeking campaign contributions to maximize political support. The predictions of the model are consistent with observed taxation decisions in developing and industrialized countries.

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Paper provided by EconWPA in its series International Trade with number 0510016.

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Length: 34 pages
Date of creation: 28 Oct 2005
Date of revision:
Handle: RePEc:wpa:wuwpit:0510016
Note: Type of Document - pdf; pages: 34
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