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Trade reform in a corrupt economy : A note

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  • Mandal, Biswajit

Abstract

We construct a general equilibrium model and analyze the effectiveness of trade reform in a distorted economy where distortion exists in form of bureaucratic corruption that arises because of trade protection at the border. In this kleptocratic set up, intermediaries are employed in order to run off from paying a part of import tariff. We use HOSV kind of framework to prove that whether trade liberalization necessarily helps reducing corruption activities and to check what happens to the production of commodities.

Suggested Citation

  • Mandal, Biswajit, 2009. "Trade reform in a corrupt economy : A note," MPRA Paper 18811, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:18811
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    References listed on IDEAS

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    1. Ronald W. Jones, 2018. "The Structure of Simple General Equilibrium Models," World Scientific Book Chapters, in: International Trade Theory and Competitive Models Features, Values, and Criticisms, chapter 4, pages 61-84, World Scientific Publishing Co. Pte. Ltd..
    2. Jones, R.W. & Marjit, S., 1992. "International Trade and Endogenous Production Structures," RCER Working Papers 312, University of Rochester - Center for Economic Research (RCER).
    3. James E. Anderson & Eric van Wincoop, 2001. "Borders, Trade and Welfare," Boston College Working Papers in Economics 508, Boston College Department of Economics.
    4. Greenaway, David & Morgan, Wyn & Wright, Peter W, 1998. "Trade Reform, Adjustment and Growth: What Does the Evidence Tell Us?," Economic Journal, Royal Economic Society, vol. 108(450), pages 1547-1561, September.
    5. Krueger, Anne O, 1998. "Why Trade Liberalisation Is Good for Growth," Economic Journal, Royal Economic Society, vol. 108(450), pages 1513-1522, September.
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    Cited by:

    1. Mandal, Biswajit, 2009. "Would Recession Induce More Intermediation in the Corrupt Informal Sector?," MPRA Paper 19930, University Library of Munich, Germany, revised 10 Jan 2010.

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    More about this item

    Keywords

    Corruption; International Trade; Tariff Reform; General Equilibrium;
    All these keywords.

    JEL classification:

    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • D5 - Microeconomics - - General Equilibrium and Disequilibrium
    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • F1 - International Economics - - Trade

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