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Rent Seeking with Politically Contestable Rights to Tariff‐rate Import Quotas*

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  • Jana Hranaiova
  • Harry de Gorter

Abstract

This paper analyzes rent seeking for agricultural import quotas and the associated waste of resources when politically contestable licenses are allocated to either or both importers and exporters. In a two‐stage simultaneous contest where firms seek rent for licenses and then bargain over the import/export price, it is shown that (1) rents are not dissipated completely because of uncertainty in allocation of “rights,” (2) the dissipation ratio increases if the country with a more competitive contest increases the probability of establishing licenses, (3) rent seeking may cause the market structure to change, (4) less rent is dissipated in the case of pre‐existing market power, and (5) allocation of multiple licenses decreases rent‐seeking outlays.

Suggested Citation

  • Jana Hranaiova & Harry de Gorter, 2005. "Rent Seeking with Politically Contestable Rights to Tariff‐rate Import Quotas*," Review of International Economics, Wiley Blackwell, vol. 13(4), pages 805-821, September.
    • Handle: RePEc:bla:reviec:v:13:y:2005:i:4:p:805-821
    DOI: 10.1111/j.1467-9396.2005.00538.x
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    References listed on IDEAS

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    1. Davis, Douglas D. & Holt, Charles a., 1993. "Experimental economics: Methods, problems and promise," Estudios Económicos, El Colegio de México, Centro de Estudios Económicos, vol. 8(2), pages 179-212.
    2. Skully, David W., 1999. "The Economics Of Trq Administration," Working Papers 14584, International Agricultural Trade Research Consortium.
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    1. Daria Loginova & Marco Portmann & Martin Huber, 2021. "Assessing the Effects of Seasonal Tariff‐rate Quotas on Vegetable Prices in Switzerland," Journal of Agricultural Economics, Wiley Blackwell, vol. 72(2), pages 607-627, June.
    2. Christian Bjørnskov, 2012. "Can bribes buy protection against international competition?," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 148(4), pages 751-775, December.
    3. Abbassi, Abdessalem & Tamini, Lota D. & Dakhlaoui, Ahlem, 2015. "Import quota allocation between regions under Cournot competition," Economic Modelling, Elsevier, vol. 51(C), pages 484-490.
    4. Philipp J. H. Schröder & Allan Sørensen, 2014. "A Welfare Ranking of Multilateral Reductions in Real and Tariff Trade Barriers when Firms are Heterogenous," Review of International Economics, Wiley Blackwell, vol. 22(3), pages 423-443, August.

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