IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/71983.html
   My bibliography  Save this paper

Optimization of government trade behavior and its implication for small developing economy (the case of Ukraine)

Author

Listed:
  • Sokolovska, Olena
  • Sokolovskyi, Dmytro

Abstract

The article deals with problem of optimization of government behavior in trade policy decision-making in small open developing economy. Based on conceptual model of government behavior we define main elements of effective trade policy. We found both their conformity to certain economic framework and conditions of their changes with each other. The analysis of advantages and disadvantages of government patterns of trade behavior showed that in order to regulate the small open developing economy its government should provide policy, based on applying of tax instruments, notably, tariffs; non-tariff measures in such conditions are as auxiliary tools. Systemic non-tariff restrictions could be regarded as an effective tool for developed innovative economies. The originality of the paper consists in developing of model of efficient government behavior in trade policy decision-making depending on the framework of national economy; also both conditions of untimely changes of government behavior patterns and ineffective frameworks appeared as consequence of these changes, were defined. We provide an econometric analysis in order to determine whether commodity exports are sensitive to reduction or elimination of tariffs (as in the case of Ukrainian exports and EU import duties). This analysis showed that now in Ukrainian economy there are commodities which are both sensitive and resistant to tariff changes.

Suggested Citation

  • Sokolovska, Olena & Sokolovskyi, Dmytro, 2016. "Optimization of government trade behavior and its implication for small developing economy (the case of Ukraine)," MPRA Paper 71983, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:71983
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/71983/1/MPRA_paper_71983.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Sokolovska, Olena & Sokolovskyi, Dmytro, 2011. "The effect of tax-tariff reform: evidence from Ukraine," MPRA Paper 42643, University Library of Munich, Germany.
    2. Lundström, Susanna, 2003. "Effects of Economic Freedom on Growth and the Environment - Implications for Cross-Country Analysis," Working Papers in Economics 115, University of Gothenburg, Department of Economics.
    3. Gawande, Kishore & Krishna, Pravin & Olarreaga, Marcelo, 2009. "What Governments Maximize and Why: The View from Trade," International Organization, Cambridge University Press, vol. 63(3), pages 491-532, July.
    4. Соколовская Е.В., 2016. "Unilateral tariff cuts: a theory," Экономический вестник университета. Сборник научных трудов ученых и аспирантов, CyberLeninka;Государственное высшее учебное заведение «Переяслав-Хмельницкий государственный педагогический университет имени Григория Сковороды», issue 29-1, pages 268-274.
    5. Lars Calmfors & Henrik Horn (ed.), 1986. "Trade Unions, Wage Formation and Macroeconomic Stability," Palgrave Macmillan Books, Palgrave Macmillan, number 978-1-349-08596-5, October.
    6. Ethier, Wilfred J., 2007. "The theory of trade policy and trade agreements: A critique," European Journal of Political Economy, Elsevier, vol. 23(3), pages 605-623, September.
    7. Stoyanov, Andrey & Yildiz, Halis Murat, 2015. "Preferential versus multilateral trade liberalization and the role of political economy," European Economic Review, Elsevier, vol. 80(C), pages 140-164.
    8. Grossman, Gene M & Helpman, Elhanan, 1994. "Protection for Sale," American Economic Review, American Economic Association, vol. 84(4), pages 833-850, September.
    9. Wilfred J. Ethier, 2004. "Political Externalities, Nondiscrimination, and a Multilateral World," Review of International Economics, Wiley Blackwell, vol. 12(3), pages 303-320, August.
    10. Kamal Saggi & Andrey Stoyanov & Halis Murat Yildiz, 2018. "Do Free Trade Agreements Affect Tariffs of Nonmember Countries? A Theoretical and Empirical Investigation," World Scientific Book Chapters, in: Kamal Saggi (ed.), Economic Analysis of the Rules and Regulations of the World Trade Organization, chapter 11, pages 238-280, World Scientific Publishing Co. Pte. Ltd..
    11. Trabandt, Mathias & Uhlig, Harald, 2011. "The Laffer curve revisited," Journal of Monetary Economics, Elsevier, vol. 58(4), pages 305-327.
    12. Kishore Gawande & Pravin Krishna & Marcelo Olarreaga, 2015. "A Political-Economic Account of Global Tariffs," Economics and Politics, Wiley Blackwell, vol. 27(2), pages 204-233, July.
    13. Krueger, Anne O, 1974. "The Political Economy of the Rent-Seeking Society," American Economic Review, American Economic Association, vol. 64(3), pages 291-303, June.
    14. Rodney D. Ludema & Anna Maria Mayda, 2013. "Do terms-of-trade effects matter for trade agreements? Theory and evidence from WTO Countries," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 128(4), pages 1837-1893.
    15. William A. Kerr & James D. Gaisford (ed.), 2007. "Handbook on International Trade Policy," Books, Edward Elgar Publishing, number 3521.
    16. Sokolovska, Olena & Sokolovskyi, Dmytro, 2014. "Tax incentive regimes: models and research methods," MPRA Paper 62415, University Library of Munich, Germany, revised 2015.
    17. Mr. Nigel A Chalk, 2001. "Tax Incentives in The Philippines: A Regional Perspective," IMF Working Papers 2001/181, International Monetary Fund.
    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. Olena Sokolovska & Dmytro Sokolovskyi, 2017. "Efficient Government Trade Behavior and Its Implication for Small Developing Economy: The Case of Ukraine," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 2, pages 64-81.
    2. Saha, Amrita, 2019. "Trade policy & lobbying effectiveness: Theory and evidence for India," European Journal of Political Economy, Elsevier, vol. 56(C), pages 165-192.
    3. Kamal Saggi & Andrey Stoyanov & Halis Murat Yildiz, 2018. "Do Free Trade Agreements Affect Tariffs of Nonmember Countries? A Theoretical and Empirical Investigation," American Economic Journal: Applied Economics, American Economic Association, vol. 10(3), pages 128-170, July.
    4. James Lake & Maia Linask, 2016. "Domestic political competition and pro-cyclical import protection," Review of International Economics, Wiley Blackwell, vol. 24(3), pages 564-591, August.
    5. Annicchiarico, Barbara & Marvasi, Enrico, 2019. "Protection for sale under monopolistic competition: Beyond the CES," European Journal of Political Economy, Elsevier, vol. 60(C).
    6. James Lake & Maia K. Linask, 2015. "Domestic political competition and binding overhang in developing countries," Departmental Working Papers 1503, Southern Methodist University, Department of Economics.
    7. Eric Conglin Chi & Halis Murat Yildiz, 2024. "Dynamic preferential trade agreement formation and the role of political economy," Economic Inquiry, Western Economic Association International, vol. 62(2), pages 748-781, April.
    8. Wolf-Heimo Grieben & Fuat Sener, 2009. "Labor Unions, Globalization, and Mercantilism," CESifo Working Paper Series 2889, CESifo.
    9. Wilfred J. Ethier, 2011. "The Political-Support View of Protection," PIER Working Paper Archive 11-026, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.
    10. Lake, James & Roy, Santanu, 2017. "Are global trade negotiations behind a fragmented world of “gated globalization”?," Journal of International Economics, Elsevier, vol. 108(C), pages 117-136.
    11. Wilfred J. Ethier & Arye L. Hillman, 2017. "The Politics of International Trade," CESifo Working Paper Series 6456, CESifo.
    12. Bin, Sheng, 2000. "The Political Economy of Trade Policy in China," Working Papers 10/2000, Copenhagen Business School, Department of Management, Politics & Philosophy.
    13. James Lake & Maia Linask, 2015. "Costly distribution and the non-equivalence of tariffs and quotas," Public Choice, Springer, vol. 165(3), pages 211-238, December.
    14. Deniz Igan & Prachi Mishra & Thierry Tressel, 2012. "A Fistful of Dollars: Lobbying and the Financial Crisis," NBER Macroeconomics Annual, University of Chicago Press, vol. 26(1), pages 195-230.
    15. Saggi, Kamal & Wong, Woan Foong & Yildiz, Halis Murat, 2017. "Preferential Trade Agreements and Rules of the Multilateral Trading System," MPRA Paper 76330, University Library of Munich, Germany.
    16. Nakakuki, Masayuki & Otani, Akira & Shiratsuka, Shigenori, 2004. "Distortions in Factor Markets and Structural Adjustments in the Economy," Monetary and Economic Studies, Institute for Monetary and Economic Studies, Bank of Japan, vol. 22(2), pages 71-99, May.
    17. Kamal Saggi & Woan Foong Wong & Halis Murat Yildiz, 2022. "The role of non‐discrimination in a world of discriminatory preferential trade agreements," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 55(1), pages 174-212, February.
    18. Yogesh Uppal, 2011. "Does legislative turnover adversely affect state expenditure policy? Evidence from Indian state elections," Public Choice, Springer, vol. 147(1), pages 189-207, April.
    19. Arteaga, Fernando & Desierto, Desiree & Koyama, Mark, 2024. "Shipwrecked by rents," Journal of Development Economics, Elsevier, vol. 168(C).
    20. Arye L. Hillman & Heinrich W. Ursprung, 2016. "Where are the rent seekers?," Constitutional Political Economy, Springer, vol. 27(2), pages 124-141, June.

    More about this item

    Keywords

    government behavior; trade policy; tariffs; econometric analysis;
    All these keywords.

    JEL classification:

    • C50 - Mathematical and Quantitative Methods - - Econometric Modeling - - - General
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    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:pra:mprapa:71983. 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: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.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.