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Strict Pareto-Improving Multilateral Reforms of Tariffs

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  • Turunen-Red, Arja H
  • Woodland, Alan D

Abstract

Starting from a tariff-distorted equilibrium of international trade, the authors examine the welfare effects of a gradual multilateral reform of tariffs (and other trade taxes and subsidies). Necessary and sufficient conditions for the existence of strict Pareto improving multilateral (differential) tariff reforms, accompanied by international transfers of income, are obtained. These results are then applied to various concrete tariff reform proposals such as proportional reductions in tariffs and the reduction of the highest ad valorem tariff rates. Some of the authors' theorems extend the generality of previously obtained results and some new tariff reform proposals are also made. Copyright 1991 by The Econometric Society.

Suggested Citation

  • Turunen-Red, Arja H & Woodland, Alan D, 1991. "Strict Pareto-Improving Multilateral Reforms of Tariffs," Econometrica, Econometric Society, vol. 59(4), pages 1127-1152, July.
    • Handle: RePEc:ecm:emetrp:v:59:y:1991:i:4:p:1127-52
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