Political and Public Finance Motives for Tariffs
Michael Hoffman ()
International Trade from EconWPA
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.
Keywords: tariffs; political economy; development; tax regimes (search for similar items in EconPapers)
JEL-codes: F1 F2 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-pol
Note: Type of Document - pdf; pages: 34
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Persistent link: http://EconPapers.repec.org/RePEc:wpa:wuwpit:0510016
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