IDEAS home Printed from https://ideas.repec.org/p/ags/pugtwp/330921.html
   My bibliography  Save this paper

Trade Taxes are Better?!?

Author

Listed:
  • Erbil, Can

Abstract

The main purpose of this paper is to find out more about welfare implications of trade reforms with a government budget constraint by expanding the study of Anderson (1999). A simple general equilibrium model with distortionary indirect taxes and an “active” government budget constraint is employed to analyze the welfare implications of a trade reform. Unlike the conventional trade theory, the tariff revenue cuts due to the tariff reform must be compensated with increases in indirect taxes and not simply assuming lump sum transfers. The concept of “Marginal Cost of Funds” (MCF) from the public finance literature is utilized to find out whether the prospective change is welfare improving or not. The empirical part of the paper generates MCF figures, which answer the question; “is replacing trade taxes with indirect taxes always beneficial?” The results are of special interest to developing countries, which rely on trade taxes as a significant source of their government revenue, as well as for organizations such as the WTO, World Bank or the IMF.

Suggested Citation

  • Erbil, Can, 2001. "Trade Taxes are Better?!?," Conference papers 330921, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    • Handle: RePEc:ags:pugtwp:330921
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/330921/files/2577.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Elbehri, Aziz & Hertel, Thomas, 2006. "A Comparative Analysis of the EU-Morocco FTA vs. Multilateral Liberalization," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 21, pages 496-525.
    2. Bchir, Mohamed Hedi & Fontagné, Lionel & Jean, Sébastien, 2005. "From Bound Duties to Actual Protection: Industrial Liberalisation in the Doha Round," Conference papers 330235, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    3. Kuiper, Marijke & van Tongeren, Frank, 2005. "Which road to liberalization in the Mediterranean? Analyzing different regional trade liberalization scenarios for Morocco and Tunisia," Conference papers 331404, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Mohamed Hedi Bchir & Sébastien Jean & David Laborde, 2006. "Binding Overhang and Tariff-Cutting Formulas," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 142(2), pages 207-232, July.
    2. Kore Marc Guei, 2019. "Does financial structure matter for economic growth: evidence from South Africa," Economics Bulletin, AccessEcon, vol. 39(3), pages 1941-1957.
    3. Sadni Jallab, Mustapha & Abdelmalki, Lahsen, 2007. "The Free Trade Agreement Between the United States and Morocco: The Importance of a Gradual and Assymetric Agreement," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 22, pages 852-887.
    4. Bouët, Antoine & Laborde Debucquet, David, 2017. "Why is the Doha Development agenda failing? And what can be done? A computable general equilibrium-game theoretical approach :," IFPRI book chapters, in: Bouët, Antoine & Laborde Debucquet, David (ed.), Agriculture, development, and the global trading system: 2000– 2015, chapter 3, International Food Policy Research Institute (IFPRI).
    5. Tchouamou Njoya, Eric, 2020. "An analysis of the tourism and wider economic impacts of price-reducing reforms in air transport services in Egypt," Research in Transportation Economics, Elsevier, vol. 79(C).
    6. Sayef Bakari & Mohamed Mabrouki, 2019. "The Relationship Between Economic Growth, Exports And Imports In Morocco: An Empirical Validation Based On Var Modeling Techniques And Causality In The Meaning Of Granger," Journal of Smart Economic Growth, , vol. 4(3), pages 47-55, December.
    7. Robinson, Sherman & Burfisher, Mary & McDonald, Scott & Thierfelder, Karen, 2006. "Deep Integration and Trade Productivity Links: Tentative Lessons from CGE International Trade Models," Conference papers 331517, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    8. Sabine Mage-Bertomeu, 2006. "Les modèles d'équilibre général appliqués à la politique commerciale : développements récents," Revue d'économie politique, Dalloz, vol. 116(3), pages 357-381.
    9. Antoine Bouët & Simon Mevel & David Orden, 2007. "More or Less Ambition in the Doha Round: Winners and Losers from Trade Liberalisation with a Development Perspective," The World Economy, Wiley Blackwell, vol. 30(8), pages 1253-1280, August.
    10. Chandrima Sikdar & Biswajit Nag, 2011. "Impact of India-ASEAN Free Trade Agreement: A cross-country analysis using applies general equilibrium modelling," Working Papers 10711, Asia-Pacific Research and Training Network on Trade (ARTNeT), an initiative of UNESCAP and IDRC, Canada..
    11. Rolleigh, Michael, 2006. "Plant Heterogeneity and Applied General Equilibrium Models of Trade: Lessons from the Canada-US Free Trade Agreement," Conference papers 331563, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    12. Bouët, Antoine, 2006. "What can the poor expect from trade liberalization?: opening the "black box" of trade modeling," MTID discussion papers 93, International Food Policy Research Institute (IFPRI).
    13. Jayatilleke S. Bandara, 2007. "The Effects of Agricultural Trade Liberalisation under the Doha Development Agenda with Special Reference to the Asia Pacific Region: A Brief Survey," Working Papers 3107, Asia-Pacific Research and Training Network on Trade (ARTNeT), an initiative of UNESCAP and IDRC, Canada..
    14. Goldbaum, Sergio & Coelho, Allexandro Mori & Lima, Maria Lúcia Labate Mantovanini Pádua & Cury, Samir, 2006. "Impacts of the proposals for tariff reductions in non-agricultural market access (Nama)," Textos para discussão 155, FGV EESP - Escola de Economia de São Paulo, Fundação Getulio Vargas (Brazil).
    15. Hess, Sebastian, 2005. "An Econometric Model of CGE Simulations," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24713, European Association of Agricultural Economists.
    16. Lee, Donna J. & Zhang, J., 2006. "Estimating Global Environmental Implications of Agricultural Trade Liberalization: A Computable General Equilibrium Analysis," 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia 25290, International Association of Agricultural Economists.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:pugtwp:330921. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/gtpurus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.