TRADE LIBERALIZATION, PUBLIC ABATEMENT, AND WELFARE

Takumi Haibara

Review of Urban & Regional Development Studies, 2006, vol. 18, issue 1, 11-24

Abstract: This paper discusses public abatement financed by pollution tax revenue or tariff revenue and investigates the welfare consequences of a tariff. The main result of this paper is that under certain conditions a tariff reduction results in an improvement in welfare through an increase in public abatement and a decrease in pollution. This result may guide policy for countries that wish to harmonize trade liberalization and the environmental protection demonstrated by both the private and the public sectors.

Date: 2006
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