Evaluating the Case for Export Subsidies
Now that import-substitution policies have failed and been discredited, there has been a shift in favor of interventions on behalf of export interests. The author argues that close scrutiny reveals these arguments to be as flawed as the old argumen...
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| Format: | Working Paper |
| Language: | English en_US |
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World Bank, Washington, DC
2015
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| Online Access: | http://documents.worldbank.org/curated/en/2000/01/438961/evaluating-case-export-subsidies http://hdl.handle.net/10986/22282 |
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okr-10986-222822021-04-23T14:04:07Z Evaluating the Case for Export Subsidies Panagariya, Arvind AGRICULTURE ASYMMETRIC INFORMATION CAPITAL MARKET CAPITAL MARKETS COMMERCIAL BANKS COMPARATIVE ADVANTAGE COMPETITIVENESS CONSUMERS CURRENCY DEVELOPMENT STRATEGY DOMESTIC MARKET DOMESTIC TAXES ECONOMETRIC EVIDENCE ECONOMIES OF SCALE ECONOMISTS EQUILIBRIUM EXCHANGE RATE EXCHANGE RATES EXPORT EXPORT BIAS EXPORT DIVERSIFICATION EXPORT INCENTIVES EXPORT INDUSTRIES EXPORT PERFORMANCE EXPORT SUBSIDIES EXPORT SUPPLY EXPORTERS EXPORTS EXTERNALITIES EXTERNALITY FINANCIAL INSTITUTIONS FOREIGN COMPETITORS FOREIGN FIRMS FOREIGN INVESTMENT FOREIGN TRADE FREE ACCESS FREE TRADE GDP GOVERNMENT INTERVENTION GOVERNMENT REGULATIONS HIGH TARIFFS IMPORT DUTIES IMPORT PROTECTION IMPORT TARIFFS IMPORTS INSURANCE INTEREST RATE INTEREST RATES LENDING RATES LOW TARIFFS MARKET DISCIPLINE MARKET IMPERFECTIONS MARKET POWER MARKET STRUCTURE MATCHING GRANTS MORAL HAZARD OVERVALUATION PERFECT COMPETITION PRIVATE COSTS PRODUCTION COSTS PRODUCTIVITY PROFITABILITY REAL EXCHANGE RATE REAL EXCHANGE RATES RESERVE BANK OF INDIA RISK AVERSE RISK NEUTRAL SOCIAL COSTS SUPPLY CURVE TARIFF PROTECTION TARIFF RATES TARIFF REVENUE TERMS OF TRADE TRADABLE GOODS TRADE LIBERALIZATION TRADE PROMOTION TRADE REGIME TRADE REGIMES UNILATERAL TRADE UNILATERAL TRADE LIBERALIZATION VALUE OF EXPORTS VENTURE CAPITAL WELFARE ECONOMICS WORKING CAPITAL WORLD MARKETS Now that import-substitution policies have failed and been discredited, there has been a shift in favor of interventions on behalf of export interests. The author argues that close scrutiny reveals these arguments to be as flawed as the old arguments for import substitution. Among other things, the author concludes that: 1) Under perfect competition, a country trying to retaliate against a trading partners export subsidies by instituting its own export subsidies, will only hurt itself. 2) The argument that export subsidies may be useful for neutralizing import tariffs, is spurious. In most practical situations, this is not possible. Removal of tariffs is a far superior policy. 3) In principle, a case can be made for protecting infant export industries in the presence of externalities. But the empirical relevance of externalities remains as illusory for export industries as it was for import-substituting industries. 4) Adverse selection and moral hazard can lead to the thinning of the market for credit insurance, but that is not a case for government intervention. 5) India's experience shows export subsidies to have little impact on exports. Brazil and Mexico's experience shows export subsidies to be a costly instrument of export diversification. 6) Those who argue that pro-export interventions were important in East Asia have not provided convincing evidence of a casual relationship between the interventions and growth. 2015-07-23T15:53:06Z 2015-07-23T15:53:06Z 2000-01 Working Paper http://documents.worldbank.org/curated/en/2000/01/438961/evaluating-case-export-subsidies http://hdl.handle.net/10986/22282 English en_US Policy Research Working Paper;No. 2276 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper East Asia and Pacific Latin America & Caribbean South Asia East Asia South America South Asia Brazil India Mexico |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
AGRICULTURE ASYMMETRIC INFORMATION CAPITAL MARKET CAPITAL MARKETS COMMERCIAL BANKS COMPARATIVE ADVANTAGE COMPETITIVENESS CONSUMERS CURRENCY DEVELOPMENT STRATEGY DOMESTIC MARKET DOMESTIC TAXES ECONOMETRIC EVIDENCE ECONOMIES OF SCALE ECONOMISTS EQUILIBRIUM EXCHANGE RATE EXCHANGE RATES EXPORT EXPORT BIAS EXPORT DIVERSIFICATION EXPORT INCENTIVES EXPORT INDUSTRIES EXPORT PERFORMANCE EXPORT SUBSIDIES EXPORT SUPPLY EXPORTERS EXPORTS EXTERNALITIES EXTERNALITY FINANCIAL INSTITUTIONS FOREIGN COMPETITORS FOREIGN FIRMS FOREIGN INVESTMENT FOREIGN TRADE FREE ACCESS FREE TRADE GDP GOVERNMENT INTERVENTION GOVERNMENT REGULATIONS HIGH TARIFFS IMPORT DUTIES IMPORT PROTECTION IMPORT TARIFFS IMPORTS INSURANCE INTEREST RATE INTEREST RATES LENDING RATES LOW TARIFFS MARKET DISCIPLINE MARKET IMPERFECTIONS MARKET POWER MARKET STRUCTURE MATCHING GRANTS MORAL HAZARD OVERVALUATION PERFECT COMPETITION PRIVATE COSTS PRODUCTION COSTS PRODUCTIVITY PROFITABILITY REAL EXCHANGE RATE REAL EXCHANGE RATES RESERVE BANK OF INDIA RISK AVERSE RISK NEUTRAL SOCIAL COSTS SUPPLY CURVE TARIFF PROTECTION TARIFF RATES TARIFF REVENUE TERMS OF TRADE TRADABLE GOODS TRADE LIBERALIZATION TRADE PROMOTION TRADE REGIME TRADE REGIMES UNILATERAL TRADE UNILATERAL TRADE LIBERALIZATION VALUE OF EXPORTS VENTURE CAPITAL WELFARE ECONOMICS WORKING CAPITAL WORLD MARKETS |
| spellingShingle |
AGRICULTURE ASYMMETRIC INFORMATION CAPITAL MARKET CAPITAL MARKETS COMMERCIAL BANKS COMPARATIVE ADVANTAGE COMPETITIVENESS CONSUMERS CURRENCY DEVELOPMENT STRATEGY DOMESTIC MARKET DOMESTIC TAXES ECONOMETRIC EVIDENCE ECONOMIES OF SCALE ECONOMISTS EQUILIBRIUM EXCHANGE RATE EXCHANGE RATES EXPORT EXPORT BIAS EXPORT DIVERSIFICATION EXPORT INCENTIVES EXPORT INDUSTRIES EXPORT PERFORMANCE EXPORT SUBSIDIES EXPORT SUPPLY EXPORTERS EXPORTS EXTERNALITIES EXTERNALITY FINANCIAL INSTITUTIONS FOREIGN COMPETITORS FOREIGN FIRMS FOREIGN INVESTMENT FOREIGN TRADE FREE ACCESS FREE TRADE GDP GOVERNMENT INTERVENTION GOVERNMENT REGULATIONS HIGH TARIFFS IMPORT DUTIES IMPORT PROTECTION IMPORT TARIFFS IMPORTS INSURANCE INTEREST RATE INTEREST RATES LENDING RATES LOW TARIFFS MARKET DISCIPLINE MARKET IMPERFECTIONS MARKET POWER MARKET STRUCTURE MATCHING GRANTS MORAL HAZARD OVERVALUATION PERFECT COMPETITION PRIVATE COSTS PRODUCTION COSTS PRODUCTIVITY PROFITABILITY REAL EXCHANGE RATE REAL EXCHANGE RATES RESERVE BANK OF INDIA RISK AVERSE RISK NEUTRAL SOCIAL COSTS SUPPLY CURVE TARIFF PROTECTION TARIFF RATES TARIFF REVENUE TERMS OF TRADE TRADABLE GOODS TRADE LIBERALIZATION TRADE PROMOTION TRADE REGIME TRADE REGIMES UNILATERAL TRADE UNILATERAL TRADE LIBERALIZATION VALUE OF EXPORTS VENTURE CAPITAL WELFARE ECONOMICS WORKING CAPITAL WORLD MARKETS Panagariya, Arvind Evaluating the Case for Export Subsidies |
| geographic_facet |
East Asia and Pacific Latin America & Caribbean South Asia East Asia South America South Asia Brazil India Mexico |
| relation |
Policy Research Working Paper;No. 2276 |
| description |
Now that import-substitution policies
have failed and been discredited, there has been a shift in
favor of interventions on behalf of export interests. The
author argues that close scrutiny reveals these arguments to
be as flawed as the old arguments for import substitution.
Among other things, the author concludes that: 1) Under
perfect competition, a country trying to retaliate against a
trading partners export subsidies by instituting its own
export subsidies, will only hurt itself. 2) The argument
that export subsidies may be useful for neutralizing import
tariffs, is spurious. In most practical situations, this is
not possible. Removal of tariffs is a far superior policy.
3) In principle, a case can be made for protecting infant
export industries in the presence of externalities. But the
empirical relevance of externalities remains as illusory for
export industries as it was for import-substituting
industries. 4) Adverse selection and moral hazard can lead
to the thinning of the market for credit insurance, but that
is not a case for government intervention. 5) India's
experience shows export subsidies to have little impact on
exports. Brazil and Mexico's experience shows export
subsidies to be a costly instrument of export
diversification. 6) Those who argue that pro-export
interventions were important in East Asia have not provided
convincing evidence of a casual relationship between the
interventions and growth. |
| format |
Working Paper |
| author |
Panagariya, Arvind |
| author_facet |
Panagariya, Arvind |
| author_sort |
Panagariya, Arvind |
| title |
Evaluating the Case for Export Subsidies |
| title_short |
Evaluating the Case for Export Subsidies |
| title_full |
Evaluating the Case for Export Subsidies |
| title_fullStr |
Evaluating the Case for Export Subsidies |
| title_full_unstemmed |
Evaluating the Case for Export Subsidies |
| title_sort |
evaluating the case for export subsidies |
| publisher |
World Bank, Washington, DC |
| publishDate |
2015 |
| url |
http://documents.worldbank.org/curated/en/2000/01/438961/evaluating-case-export-subsidies http://hdl.handle.net/10986/22282 |
| _version_ |
1764450598218891264 |