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Measuring Inefficiency In The Presence Of An Export Tax, An Import Tariff, And A State Trading Enterprise

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  • Schmitz, Troy G.

Abstract

Agricultural sales cooperative unions (ASCUs) in Turkey are heavily influenced by both domestic and international government policies. Both export taxes and import tariffs are used as policy tools to regulate cotton markets. Domestic price support programs, water subsidies, fertilizer subsidies, and credit subsidies have also been used as domestic policy tools. These types of subsidies are not uncommon among developing countries. This paper provides empirical estimates of the degree of economic inefficiency associated with government intervention in Turkish cotton markets. A two-region partial equilibrium model of cotton exports and imports is developed under the "small country assumption" to obtain empirical estimates of the deadweight welfare loss associated with these government subsidies. Although government intervention results in significant income distribution among the various cotton sectors within Turkey, the overall economic inefficiency of the redistribution is very low.

Suggested Citation

  • Schmitz, Troy G., 2002. "Measuring Inefficiency In The Presence Of An Export Tax, An Import Tariff, And A State Trading Enterprise," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 34(01), pages 1-13, April.
    • Handle: RePEc:ags:joaaec:15510
    DOI: 10.22004/ag.econ.15510
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    References listed on IDEAS

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    1. Mercenier, Jean & Yeldan, Erinc, 1997. "On Turkey's trade policy: Is a customs union with Europe enough?," European Economic Review, Elsevier, vol. 41(3-5), pages 871-880, April.
    2. Schmitz, Andrew & Furtan, William Hartley & Baylis, Katherine R., 1999. "State Trading and the Upcoming WTO Discussions," Choices: The Magazine of Food, Farm, and Resource Issues, Agricultural and Applied Economics Association, vol. 14(2), pages 1-4.
    3. Glenn W. Harrison & Thomas F. Rutherford & David G. Tarr, 2014. "Trade Reform in the Partially Liberalized Economy of Turkey," World Scientific Book Chapters, in: APPLIED TRADE POLICY MODELING IN 16 COUNTRIES Insights and Impacts from World Bank CGE Based Projects, chapter 5, pages 95-121, World Scientific Publishing Co. Pte. Ltd..
    4. Ackerman, Karen Z. & Dixit, Praveen M., 1999. "An Introduction To State Trading In Agriculture," Agricultural Economic Reports 33909, United States Department of Agriculture, Economic Research Service.
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    Cited by:

    1. Steve McCorriston & Donald MacLaren, 2013. "Redistribution, state trading enterprises and ‘politically optimal’ tariffs," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 46(4), pages 1351-1379, November.
    2. Schmitz Troy G. & Schmitz Andrew, 2002. "Food Supply Management and Tariffication: A Game Theoretic Approach," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 1(1), pages 1-21, October.

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