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The Case Against Tariff Compensation

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  • Peter G. Warr

Abstract

Should lightly protected industries be given tariff compensation? Reasonable people can and do differ on this issue; neither the case supporting tariff compensation nor that opposing it is fully conclusive. Nevertheless, it is the purpose of this paper to argue that, on balance, the stronger argument is on the negative side. It is argued that economists in particular should focus their limited influence on recommending tariff reductions rather than tariff compensation, but that even if this fails they should be most reluctant to recommend tariff compensation. The potential benefits from tariff compensation are small relative to the gains from tariff reduction but the informational problems of tariff compensation are such as to make even these small potential benefits unlikely in practice.
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Suggested Citation

  • Peter G. Warr, 1978. "The Case Against Tariff Compensation," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 22(2-3), pages 85-98, 08-12.
    • Handle: RePEc:bla:ajarec:v:22:y:1978:i:2-3:p:85-98
    DOI: j.1467-8489.1978.tb00209.x
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    1. repec:bla:ecorec:v:53:y:1977:i:142&143:p:149-66 is not listed on IDEAS
    2. Richard E. Caves, 1976. "Economic Models of Political Choice: Canada's Tariff Structure," Canadian Journal of Economics, Canadian Economics Association, vol. 9(2), pages 278-300, May.
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    4. Kym Anderson, 1978. "On Why Rates Of Assistance Differ Between Australia'S Rural Industries," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 22(2-3), pages 99-114, 08-12.
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    6. repec:bla:ecorec:v:55:y:1979:i:148:p:20-32 is not listed on IDEAS
    7. Lloyd, Peter J., 1975. "Tariff Compensation: An Undesirable Policy," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 19(3), pages 1-8, December.
    8. Sen, Amartya K, 1972. "Control Areas and Accounting Prices: An Approach to Economic Evaluation," Economic Journal, Royal Economic Society, vol. 82(325), pages 486-501, Supplemen.
    9. Lord Robbins, 1971. "Autobiography of an Economist," Palgrave Macmillan Books, Palgrave Macmillan, number 978-1-349-01164-3, March.
    10. Peter J. Lloyd, 1975. "Tariff Compensation: An Undesirable Policy," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 19(3), pages 146-153, December.
    11. Stuart Harris, 1975. "Tariff Compensation: Sufficient Justification For Assistance To Australian Agriculture?," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 19(3), pages 131-145, December.
    12. repec:bla:ecorec:v:53:y:1977:i:144:p:508-16 is not listed on IDEAS
    13. Peter G. Warr, 1977. "Shadow Pricing with Policy Constraints," The Economic Record, The Economic Society of Australia, vol. 53(2), pages 149-166, June.
    14. Harris, Stuart, 1975. "Tariff Compensation: Sufficient Justification For Assistance To Australian Agriculture?," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 19(3), pages 1-15, December.
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    Cited by:

    1. Kym Anderson & Peter Lloyd & Donald Maclaren, 2007. "Distortions to Agricultural Incentives in Australia Since World War II," The Economic Record, The Economic Society of Australia, vol. 83(263), pages 461-482, December.
    2. Kym Anderson, 2020. "Trade Protectionism In Australia: Its Growth And Dismantling," Journal of Economic Surveys, Wiley Blackwell, vol. 34(5), pages 1044-1067, December.
    3. William J. Martin, 1990. "Public Choice Theory And Australian Agricultural Policy Reform," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 34(3), pages 189-211, December.
    4. Anderson, Kym & de Nicola, Francesca & Jara, Esteban & Kurzweil, Marianne & Sandri, Damiano & Valenzuela, Ernesto, 2007. "Distortions in farmer prices since 1950s: South Africa in international perspective," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 46(4), pages 1-33, December.
    5. Gerritsen, Rolf & Abbott, Jacky, 1989. "Again The Lucky Country?: Australian Rural Policy in 1988 and 1989," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 58(01), pages 1-17, April.
    6. Fisher, Brian S., 1985. "Frontiers in Agricultural Policy Research," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 53(02), pages 1-11, August.
    7. Peter Lloyd & Peter Lloyd, 2013. "Relative Assistance to Agriculture and Manufacturing since Federation," Department of Economics - Working Papers Series 1173, The University of Melbourne.
    8. Jarrett, Frank G. & McColl, James C., 1984. "Comments On The Balderstone Report: Reply," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 28(1), pages 1-10, April.
    9. Davidson, Bruce Robinson, 1992. "Rum Corps to IXL: Services to Pastoralists and Farmers in New South Wales, Part IV 1930-1990: Depression, War and Peace," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 60(03), pages 1-35, December.
    10. Roger G. Mauldon, 2021. "Early Analytical Agricultural Economics in Australia," Australian Economic History Review, Economic History Society of Australia and New Zealand, vol. 61(1), pages 45-63, March.
    11. Anderson, Kym, 2003. "Impact assessment of IFPRI's research and related activities based on economywide modeling," Impact assessments 21, International Food Policy Research Institute (IFPRI).

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