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Incremental Protection and Efficient Political Choice between Tariffs and Quotas

William Kaempfer (), McClure J. Harold and Thomas D. Willett

Canadian Journal of Economics, 1989, vol. 22, issue 2, 228-36

Abstract: This paper offers a new political economy explanation for the increasing use in recent years of quotas instead of, or in combination with, tariffs as a form of trade protection. The authors show that, under domestic monopoly, the comparative efficiency of tariffs and quotas in achieving political objectives will vary depending on the nature of the market and the level of protection. At high levels of protection, quotas can become more politically efficient than tariffs. They also show that, at low levels of protection, a price equivalent quota may not exist.

Date: 1989
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