Illusory Revenues: Import tariffs in Resource-Rich and Aid-Rich Economies

Anthony Venables and Paul Collier

No 4, OxCarre Working Papers from Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford

Abstract: Where imports are financed predominantly by rents from resource extraction or aid, the revenue generated by tariffs is illusory. Revenue earned by the tariff is offset by a reduction in the real value of aid and resource rents. Revenue is however moved between accounts in the government budget which, in the case of aid, may reduce the burden of donor conditionality. We demonstrate this proposition for a simple central case and show that the result is not overturned by generalisations around this case. We argue that trade policy formulation in such economies should recognise the illusory nature of tariff revenues.

Keywords: Aid; natural resources; import tariffs (search for similar items in EconPapers)
JEL-codes: F1 F35 Q3 (search for similar items in EconPapers)
Date: 2008-03-12
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Citations: View citations in EconPapers (4)

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Journal Article: Illusory revenues: Import tariffs in resource-rich and aid-rich economies (2011)
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