Rent-Extracting Tariffs and the Management of Exhaustible Resources

James A. Brander and Slobodan Djajic

Working Papers from Queen's University, Department of Economics

Abstract: The paper examines the interaction between a resource-exporting and a resource-importing country. The exporter chooses an optimal depletion rate and decides the allocation of the extracted resource between exports and domestic use. Optimal management from a national view entails inefficiency from a global perspective because too little resource is exported since the supplying country exploits its monopoly power. The importing country, however, has incentive to extract some of the resource rent with a tariff. The optimal tariff induces greater overall inefficiency.

Date: 1982

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Journal Article: Rent-Extracting Tariffs and the Management of Exhaustible Resources (1983)
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Persistent link: http://EconPapers.repec.org/RePEc:qed:wpaper:468

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