Redistribution, state trading enterprises and ‘politically optimal’ tariffs
McCorriston, S; MacLaren, D
Date: 1 November 2013
Journal
Canadian Journal of Economics / Revue Canadienne d'Économique
Publisher
Wiley for Canadian Economics Association
Publisher DOI
Abstract
State trading enterprises (STEs) are widely used and can be viewed as instruments of trade policy. We analyse two aspects: the first is their potential trade distorting effect; the second is how they modify the case for the ‘politically optimal’ tariff. We show that the STE can reduce the need for a tariff designed for domestic ...
State trading enterprises (STEs) are widely used and can be viewed as instruments of trade policy. We analyse two aspects: the first is their potential trade distorting effect; the second is how they modify the case for the ‘politically optimal’ tariff. We show that the STE can reduce the need for a tariff designed for domestic redistribution. This result introduces some ambiguity about how STEs are interpreted: from a multilateralist perspective, they should be dealt with in the same way as other non-tariff barriers; from a nationalistic perspective, they can reduce the need for ‘politically optimal.’
State trading enterprises (STEs) are widely used and can be viewed as instruments of trade policy. We analyse two aspects: the first is their potential trade distorting effect; the second is how they modify the case for the ‘politically optimal’ tariff. We show that the STE can reduce the need for a tariff designed for domestic redistribution. This result introduces some ambiguity about how STEs are interpreted: from a multilateralist perspective, they should be dealt with in the same way as other non-tariff barriers; from a nationalistic perspective, they can reduce the need for ‘politically optimal.’
Economics
Faculty of Environment, Science and Economy
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