Political-Economy Arguments for a Uniform Tariff

Arvind Panagariya and Dani Rodrik

No 3661, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Uniform tariffs have become increasingly popular in recent years, yet their economic rationale is not strong. We identify and evaluate three sets of reasons as to why governments may prefer tariff uniformity as a means of alleviating political motives for excessive protection. First, a free-rider effect may be conducive to less lobbying under a uniform tariff regime than under a regime in which tariffs are allowed to differ. Second, an input-price effect may dampen the enthusiasm of final-goods producers for import protection. Third, a precommitment effect may increase the cost to a future government of protecting favored sectors. None of these arguments provides an unambiguous, airtight case for tariff uniformity. The decision on uniformity has to be made on a case-by-case basis.

Date: 1991-03
Note: ITI IFM
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Citations: View citations in EconPapers (6)

Published as International Economic Review, August 1993

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