Stretching the Inelastic Rubber: Taxation, Welfare and Lobbies in Amazonia, 1870-1910

Felipe Tâmega Fernandes ()
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Felipe Tâmega Fernandes: Harvard Business School, Entrepreneurial Management Unit

No 10-032, Harvard Business School Working Papers from Harvard Business School

Abstract: This paper examines the effect of government intervention via taxation on domestic welfare. A case-study of Brazilian market power on rubber markets during the boom years of 1870-1910 shows that the government generated 1.3% of GDP through an export tax on rubber but that it could have generated 4.7% in total, had the government set the tariff at the optimal level. National, regional and local constraints prevented the government from maximizing regional welfare. In a context of lobbies, government budget maximization may have differed from regional welfare maximization.

Keywords: Rubber; Commodities; Market Power; Optimal Tariff; Welfare; Trade and Brazil. (search for similar items in EconPapers)
JEL-codes: F14 H21 L13 L73 N76 (search for similar items in EconPapers)
Pages: 43 pages
Date: 2009-10
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Persistent link: https://EconPapers.repec.org/RePEc:hbs:wpaper:10-032

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