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Redistribution, state trading enterprises and politically optimal tariffs

Author

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  • Steve McCorriston
  • Donald MacLaren

Abstract

State trading enterprises (STEs) are widely used and can be viewed as instruments of trade policy. We analyse two aspects: the first is their potential trade distorting effect; the second is how they modify the case for the politically optimal tariff. We show that the STE can reduce the need for a tariff designed for domestic redistribution. This result introduces some ambiguity about how STEs are interpreted: from a multilateralist perspective, they should be dealt with in the same way as other nontariff barriers; from a nationalistic perspective, they can reduce the need for politically optimal.

Suggested Citation

  • Steve McCorriston & Donald MacLaren, 2013. "Redistribution, state trading enterprises and politically optimal tariffs," Canadian Journal of Economics, Canadian Economics Association, vol. 46(4), pages 1351-1379, November.
    • Handle: RePEc:cje:issued:v:46:y:2013:i:4:p:1351-1379
    DOI: 10.1111/caje.12051
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    Cited by:

    1. Colin A. Carter & Shon M. Ferguson, 2019. "Deregulation and regional specialization: Evidence from Canadian agriculture," Canadian Journal of Economics, Canadian Economics Association, vol. 52(4), pages 1497-1522, November.

    More about this item

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

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