On the Design of Tariff Policy : A Practical Guide to the Arguments For and Against Uniform Tariffs
This chapter examines the arguments for and against a uniform tariff structure. Arguments against uniformity are: terms of trade; ‘strategic,’ infant or restructuring industry considerations, revenue or balance of payments purposes, and tariffs as...
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World Bank, Washington, DC
2017
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| Online Access: | http://documents.worldbank.org/curated/en/562241486624901336/On-the-design-of-tariff-policy-a-practical-guide-to-the-arguments-for-and-against-uniform-tariffs http://hdl.handle.net/10986/26132 |
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okr-10986-261322021-04-23T14:04:33Z On the Design of Tariff Policy : A Practical Guide to the Arguments For and Against Uniform Tariffs Tarr, David G. tariffs trade policy uniform tariffs infant industry protection tariff revenues balance of payments WTO tariff uniformity This chapter examines the arguments for and against a uniform tariff structure. Arguments against uniformity are: terms of trade; ‘strategic,’ infant or restructuring industry considerations, revenue or balance of payments purposes, and tariffs as a negotiating tool at the WTO. Arguments in favor of uniformity are: political economy considerations; administrative convenience; and reduction of smuggling and corruption in customs. The author maintain that tariff uniformity is the best choice in practice. A uniform tariff conveys a number of advantages, the most important of which is that if the tariff is uniform, the gains to industry lobbying are much smaller (and may be negative), creating a kind of free-rider problem for the lobbying industry and dramatically reduces the incentive to lobby for protection. Then: (1) the level of protection is likely to be lower (the recent experience of Chile is a dramatic case in point); (2) there is a direct saving of resources from the reduced lobbying; (3) the reduction to the gains from lobbying for protection provides a vastly improved signal to valuable entrepreneurial talent which will thus be encouraged to create better and cheaper products; and (4) the reduction in resources devoted to lobbying will result in less corruption in government, which may have positive spillover effects into other dimensions of government activity. 2017-02-22T20:51:05Z 2017-02-22T20:51:05Z 2000-09 Working Paper http://documents.worldbank.org/curated/en/562241486624901336/On-the-design-of-tariff-policy-a-practical-guide-to-the-arguments-for-and-against-uniform-tariffs http://hdl.handle.net/10986/26132 English en_US CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Working Paper |
| 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 |
tariffs trade policy uniform tariffs infant industry protection tariff revenues balance of payments WTO tariff uniformity |
| spellingShingle |
tariffs trade policy uniform tariffs infant industry protection tariff revenues balance of payments WTO tariff uniformity Tarr, David G. On the Design of Tariff Policy : A Practical Guide to the Arguments For and Against Uniform Tariffs |
| description |
This chapter examines the arguments for
and against a uniform tariff structure. Arguments against
uniformity are: terms of trade; ‘strategic,’ infant or
restructuring industry considerations, revenue or balance of
payments purposes, and tariffs as a negotiating tool at the
WTO. Arguments in favor of uniformity are: political economy
considerations; administrative convenience; and reduction of
smuggling and corruption in customs. The author maintain
that tariff uniformity is the best choice in practice. A
uniform tariff conveys a number of advantages, the most
important of which is that if the tariff is uniform, the
gains to industry lobbying are much smaller (and may be
negative), creating a kind of free-rider problem for the
lobbying industry and dramatically reduces the incentive to
lobby for protection. Then: (1) the level of protection is
likely to be lower (the recent experience of Chile is a
dramatic case in point); (2) there is a direct saving of
resources from the reduced lobbying; (3) the reduction to
the gains from lobbying for protection provides a vastly
improved signal to valuable entrepreneurial talent which
will thus be encouraged to create better and cheaper
products; and (4) the reduction in resources devoted to
lobbying will result in less corruption in government, which
may have positive spillover effects into other dimensions of
government activity. |
| format |
Working Paper |
| author |
Tarr, David G. |
| author_facet |
Tarr, David G. |
| author_sort |
Tarr, David G. |
| title |
On the Design of Tariff Policy : A Practical Guide to the Arguments For and Against Uniform Tariffs |
| title_short |
On the Design of Tariff Policy : A Practical Guide to the Arguments For and Against Uniform Tariffs |
| title_full |
On the Design of Tariff Policy : A Practical Guide to the Arguments For and Against Uniform Tariffs |
| title_fullStr |
On the Design of Tariff Policy : A Practical Guide to the Arguments For and Against Uniform Tariffs |
| title_full_unstemmed |
On the Design of Tariff Policy : A Practical Guide to the Arguments For and Against Uniform Tariffs |
| title_sort |
on the design of tariff policy : a practical guide to the arguments for and against uniform tariffs |
| publisher |
World Bank, Washington, DC |
| publishDate |
2017 |
| url |
http://documents.worldbank.org/curated/en/562241486624901336/On-the-design-of-tariff-policy-a-practical-guide-to-the-arguments-for-and-against-uniform-tariffs http://hdl.handle.net/10986/26132 |
| _version_ |
1764461026239053824 |