The Optimal Tariff for Public Good and Public Input Provision

Michael Michael

Public Finance Review, 1997, vol. 25, issue 1, 117-133

Abstract: It is well known that when tariff revenue is distributed to consumers as a lump sum, the optimum policy for a small country is free trade because a tariff reduces its welfare. Many less-developed countries, however, use tariff revenue to finance the provision of public goods or public inputs, such as technical training or infrastruc ture. This article builds a small open economy model with three private goods—one imported, one exported, and one nontraded—and where the government uses tariff revenue to finance the provision of a public good or input. Within this framework, the article derives the optimum tariff formulas and efficiency rules for public good and public input provision and compares the latter with the efficiency rules when the provision of public goods is financed with consumption taxes.

Date: 1997
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://journals.sagepub.com/doi/10.1177/109114219702500107 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:sae:pubfin:v:25:y:1997:i:1:p:117-133

DOI: 10.1177/109114219702500107

Access Statistics for this article

More articles in Public Finance Review
Bibliographic data for series maintained by SAGE Publications ().