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Political and Public Finance Motives for Tariffs

Author

Listed:
  • Michael E. S. Hoffman

    (U.S. Government Accountability Office)

Abstract

Governments face many constraints when making taxation decisions, including revenue needs, political objectives, and administrative capacities. Tariffs have an appealing combination of features for politicians: they provide a stream of revenue that is easy to collect, as well as satisfying political objectives in import-competing industries. This paper describes the tax structure governments choose when they are not purely benevolent. In the model the government must finance a stream of public expenditures while simultaneously seeking campaign contributions to maximize political support. The predictions of the model are consistent with observed taxation decisions in developing and industrialized countries.

Suggested Citation

  • Michael E. S. Hoffman, 2005. "Political and Public Finance Motives for Tariffs," International Trade 0510016, University Library of Munich, Germany.
    • Handle: RePEc:wpa:wuwpit:0510016
    Note: Type of Document - pdf; pages: 34
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    File URL: https://econwpa.ub.uni-muenchen.de/econ-wp/it/papers/0510/0510016.pdf
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    tariffs; political economy; development; tax regimes;
    All these keywords.

    JEL classification:

    • F1 - International Economics - - Trade
    • F2 - International Economics - - International Factor Movements and International Business

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    This paper has been announced in the following NEP Reports:

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