Trade Policy with Heterogeneous Traders: Do Quotas Get a Bum Rap?
Kala Krishna () and
Ling Hui Tan ()
No 13040, NBER Working Papers from National Bureau of Economic Research, Inc
This paper considers the effects of trade policy--tariffs and quotas--when importing is done by competitive traders who are identical ex ante but differ ex post. We show that the standard equivalence results no longer hold and the conventional ranking of tariffs and quotas is turned on its head: quotas are not as bad for welfare as previously believed, while tariffs may restrict trade by more than originally intended. Furthermore, the allocation of property rights (quota licenses) has real effects beyond the distribution of rents; this, in turn, has implications for the effects of corruption on welfare.
JEL-codes: F1 F18 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations Track citations by RSS feed
Published as Kala Krishna & Ling Hui Tan, 2007. "Trade Policy with Heterogeneous Traders: Do Quotas Get a Bum Rap?," IMF Working Papers, vol 07(92).
Downloads: (external link)
Working Paper: Trade Policy with Heterogeneous Traders; Do Quotas Get a Bum Rap? (2007)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:13040
Ordering information: This working paper can be ordered from
Access Statistics for this paper
More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().