Political-Economy Arguments for a Uniform Tariff

Arvind Panagariya and Dani Rodrik

International Economic Review, 1993, vol. 34, issue 3, 685-703

Abstract: We consider three political-economy arguments in favor of a uniform tariff rule (UTR). First, if tariffs are determined by lobbying, adoption of a UTR creates a free-rider problem. A tariff resulting from lobbying by one sector becomes available to all other sectors. This reduces incentive for lobbying. Second, if there are imported inputs which are used by import-competing sectors, a UTR leads to a lower level of lobbying. Finally, a UTR may tie the hands of a future government expected to favor certain sectors over others, and enhance welfare ex ante. None of these presents an air-tight case for uniformity. Copyright 1993 by Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.

Date: 1993
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Working Paper: Political-Economy Arguments for a Uniform Tariff (1991)
Working Paper: Political economy arguments for uniform tariffs (1991)
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