Wasteful trade barriers in oligopoly
Keita Kamei and
Kentaro Inomata
Applied Economics Letters, 2024, vol. 31, issue 18, 1856-1861
Abstract:
Non-Tariff Barriers (NTBs) are known to exist in various forms. In this study, we investigate the role of Red-Tape Barriers (RTBs), a type of NTBs resulting from wasteful bureaucratic procedures, in a bilateral trade model under international oligopolistic competition. We demonstrate that, under relatively weak conditions, RTBs can arise endogenously. Furthermore, we reveal that RTBs can exhibit reactions opposite to tariffs. Specifically, we show that an increase in tariffs can lead to a significant decrease in RTBs, causing total trade costs to decline, which we call ‘backlash’. Additionally, when the backlash occurs, an increase in tariffs can improve consumer surplus, government revenue and expenditure, and social surplus. This study implies that tariff elimination, with the presence of RTBs, may hinder trade liberalization and reduce social surplus, emphasizing the need to carefully consider RTBs’ effects in trade policy, especially for oligopolistic industries.
Date: 2024
References: Add references at CitEc
Citations:
Downloads: (external link)
http://hdl.handle.net/10.1080/13504851.2023.2208332 (text/html)
Access to full text is restricted to subscribers.
Related works:
Working Paper: Wasteful Trade Barriers in Oligopoly (2022) 
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:taf:apeclt:v:31:y:2024:i:18:p:1856-1861
Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/RAEL20
DOI: 10.1080/13504851.2023.2208332
Access Statistics for this article
Applied Economics Letters is currently edited by Anita Phillips
More articles in Applied Economics Letters from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().