Are duty drawbacks on exports worth the hassle?

Elena Ianchovichina

Canadian Journal of Economics, 2007, vol. 40, issue 3, 881-913

Abstract: Many countries use duty drawbacks on exports, yet there is no consensus whether countries should embrace or abandon them. The answer depends on countries' development priorities and economic conditions. An increase in the drawback has a positive impact on export competitiveness, but the welfare effect is ambiguous. A welfare increase is more likely if the economy is small with high input tariffs, low initial drawback, low administrative costs and tariff leakages. In China duty drawback removal after meeting its WTO commitments improves welfare, but hurts economic efficiency, export competitiveness, and real incomes. Further liberalization can mitigate these negative effects.

JEL-codes: F11 F13 (search for similar items in EconPapers)
Date: 2007
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Related works:
Journal Article: Are duty drawbacks on exports worth the hassle? (2007)
Working Paper: Duty drawbacks, competitiveness, and growth - are duty drawbacks worth the hassle? (2005)
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