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A model of substitution of non-tariff barriers for tariffs

Zhihao Yu ()

Canadian Journal of Economics, 2000, vol. 33, issue 4, 1069-1090

Abstract: In this paper some coherent explanations are suggested for tariff reductions and substitution of non-tariff barriers for tariffs, taking into account both organized special interests and unorganized consumer interests. The focus is on how the presence of informed consumers affects the political equilibrium choice of trade policy. Three effects are identified that interact with each other as an incumbent government substitutes a NTB for a tariff, and, among other things, it is found that an increase in foreign competition will not cause the government to substitute NTBs for tariffs, but a rise in the government's valuation of political contribution might do so.

JEL-codes: F13 D72 (search for similar items in EconPapers)
Date: 2000
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Handle: RePEc:cje:issued:v:33:y:2000:i:4:p:1069-1090