Trade Taxes and Welfare: The Case of Export Incentives in South‐East Asian Countries

Rodney Falvey and Norman Gemmell

Australian Economic Review, 1990, vol. 23, issue 4, 61-73

Abstract: It is now widely recognised that the distortions common in many developing countries lead to a bias against exporting. In consequence many governments have begun to provide export incentives aimed at compensating for this bias. This article begins by examining the range of such incentives offered in South‐East Asian countires. It then goes on to use the standard theory of the second‐best to develop a simple framework within which these policies can be assessed. The difficulties encountered in constructing a system of export incentives that will not introduce distortions of their own are highlighted. The constraints imposed by GATT obligations are also noted.

Date: 1990
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