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Incidence theory and the shifting of protection across sectors: the South Asian experience

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  • Priniti Panday

Abstract

Using the theoretical framework of a simple general equilibrium model, this paper examines whether strategies aimed at protecting or promoting manufacturing industries indirectly taxed the agricultural and service sectors. A panel data set consisting of five South Asian countries over a 26 year time period is employed in the analysis. Three different estimation procedures are used to account for factors that are country specific and those that are common to all countries. The results indicate that the agricultural sector indirectly felt the brunt of the net protection provided to manufactures due to the 'shifting of protection' across sectors. The service sector, on the other hand, indirectly benefited from the general equilibrium spillover effects.

Suggested Citation

  • Priniti Panday, 2003. "Incidence theory and the shifting of protection across sectors: the South Asian experience," Applied Economics, Taylor & Francis Journals, vol. 35(2), pages 125-132.
    • Handle: RePEc:taf:applec:v:35:y:2003:i:2:p:125-132
    DOI: 10.1080/0003684022000015892
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    References listed on IDEAS

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    1. Njinkeu, Dominique, 1996. "Evaluation of the incentive structure: A survey and application to Cameroon," World Development, Elsevier, vol. 24(3), pages 557-568, March.
    2. Navaratne, N. M. C., 1991. "Who bears the incidence of import protection? Evidence from Sri Lanka," World Development, Elsevier, vol. 19(10), pages 1409-1419, October.
    3. Andrew McKay & Chris Milner, 1997. "Measuring trade strategy in the presence of non-tradeables: Theory and some evidence for the Caribbean," Journal of Development Studies, Taylor & Francis Journals, vol. 33(5), pages 658-674.
    4. L.A. Sjaastad & K.W. Clements, 1981. "The Incidence of Protection: Theory and measurement," Economics Discussion / Working Papers 81-04, The University of Western Australia, Department of Economics.
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    Cited by:

    1. Clements, Kenneth W. & Fry, Renée, 2008. "Commodity currencies and currency commodities," Resources Policy, Elsevier, vol. 33(2), pages 55-73, June.
    2. Priniti Panday, 2003. "An Empirical Analysis Of The Determinants Of Earning And Employment: Does Trade Protection Matter?," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 28(1), pages 35-47, June.
    3. repec:kap:iaecre:v:11:y:2005:i:4:p:417-432 is not listed on IDEAS

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    2. Priniti Panday, 2005. "Trade liberalization and the Labor Market Revisited," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 11(4), pages 417-432, November.
    3. Njinkeu, Dominique, 1996. "Evaluation of the incentive structure: A survey and application to Cameroon," World Development, Elsevier, vol. 24(3), pages 557-568, March.
    4. M.A. Marais, 1992. "The Cost of Protection to Western Australia," Economics Discussion / Working Papers 92-27, The University of Western Australia, Department of Economics.
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    6. Chris Milner, 1995. "Relative Incentives and Trade Strategies: Typologies and Possibilities," The Economic Record, The Economic Society of Australia, vol. 71(3), pages 230-239, September.
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    8. Clements, Kenneth W. & Fry, Renée, 2008. "Commodity currencies and currency commodities," Resources Policy, Elsevier, vol. 33(2), pages 55-73, June.
    9. David E Yuravlivker, 1985. "Precios Relativos Efectivos versus de Equilibrio: El Impacto de la Política Cambiaria," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 22(65), pages 145-152.
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