Why Governments Tax or Subsidize Trade : Evidence from Agriculture

This paper empirically explores the political-economic determinants of why governments choose to tax or subsidize trade in agriculture. The authors use a new data set on nominal rates of assistance (NRA) across a number of commodities spanning the...

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Bibliographic Details
Main Authors:	Gawande, Kishore, Hoekman, Bernard
Format:	Working Paper
Language:	English en_US
Published:	World Bank, Washington, DC 2017
Subjects:	AGRICULTURAL CONSUMPTION AGRICULTURAL ECONOMICS AGRICULTURAL EXPORTS AGRICULTURAL MARKETS AGRICULTURAL OUTPUT AGRICULTURAL POLICIES AGRICULTURAL POLICY AGRICULTURAL PRICES AGRICULTURAL PRODUCTION AGRICULTURAL PRODUCTS AGRICULTURAL SECTOR AGRICULTURE APPLES BARLEY BEEF CAPITAL INTENSITY CAPITAL STOCKS CAPITAL USE CASH CROPS COCOA COCONUT COFFEE COMMODITIES COMMODITY COMPARATIVE ADVANTAGE COMPETITIVENESS CONSUMERS COTTON CROP DEFORESTATION DEMOCRACIES DEMOCRACY DEVELOPING COUNTRIES DEVELOPING COUNTRY DOMESTIC MARKET DOMESTIC PRICE DOMESTIC PRICES ECONOMETRIC ANALYSIS ECONOMETRIC MODELS ECONOMIC DEVELOPMENT ECONOMIC REFORMS ECONOMICS LITERATURE EGG EGGS EXPORTS FARM FARM INCOMES FARMER FARMERS FARMING FOOD CROPS FOOD IMPORTS FOOD POLICY FOOD POLICY RESEARCH FOOD PRICES FOOD PRODUCTS FOOD STAPLES FRUIT FUTURE STUDIES GARLIC GDP GOVERNMENT INTERVENTIONS GRAINS GROUNDNUT HUMAN CAPITAL IMPORT QUOTAS INCOME INCOME DISTRIBUTION INDUSTRIAL COUNTRIES INDUSTRIALIZATION INEFFICIENCY INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE INTERNATIONAL TRADE JUTE LABOR FORCE LABOR MARKET LABOR PRODUCTIVITY LAND DEGRADATION LAND PRODUCTIVITY LIBERALIZATION LOW-INCOME COUNTRIES MAIZE MARGINAL COST MARKET ACCESS MEAT MEDIAN VOTERS MILK MULCH MULTILATERAL TRADE NATURAL RESOURCE NATURAL RESOURCE MANAGEMENT OILSEEDS ORANGE OUTPUT RATIO OUTPUT RATIOS OUTPUTS PALM OIL PEAS PIG MEAT PLANTING POLITICAL ECONOMY POPULATION GROWTH PORK POTATO POULTRY PRICE DISTORTIONS PRICE FLUCTUATIONS PROCESSED FOODS PRODUCE PRODUCERS PRODUCTIVITY PRODUCTIVITY OF LAND PROTECTIONISM PUBLIC POLICY RAPESEED REFORM PROGRAMS RICE RICH ONES RUBBER RURAL WORKERS RYE SESAME SHEEP MEAT SOIL FERTILITY SOYBEAN STAPLE FOODS SUBSIDIZATION SUGAR SUGAR SORGHUM SUNFLOWER SUNK COSTS TARIFF BARRIERS TAX TAX SYSTEMS TAXATION TEA TOBACCO TRADE NEGOTIATIONS TRADE POLICIES TRADE POLICY TRADE TAXES TYPES OF INSTRUMENTS URBANIZATION URUGUAY ROUND VALUE OF OUTPUT VARIABLE COSTS VEGETABLES VEGETATION WAGES WHEAT WINE WORLD DEVELOPMENT INDICATORS WORLD MARKETS WORLD TRADE WTO
Online Access:	http://documents.worldbank.org/curated/en/393041468152708786/Why-governments-tax-or-subsidize-trade-evidence-from-agriculture http://hdl.handle.net/10986/28182

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Summary:	This paper empirically explores the political-economic determinants of why governments choose to tax or subsidize trade in agriculture. The authors use a new data set on nominal rates of assistance (NRA) across a number of commodities spanning the last five decades for 64 countries. NRAs measure the effect on domestic (relative to world) price of the quantitative and price-based instruments used to regulate agricultural markets. The data set admits consideration of both taxes and subsidies on exports and imports. The authors find that both economic and political variables play important roles in determining the within-variation in the NRA data. Based on results the authors offer a number of data-driven exploratory hypotheses that can inform future theoretical and empirical research on why governments choose to tax or subsidize agricultural products an important policy question that is also one of the least understood by scholars.

Why Governments Tax or Subsidize Trade : Evidence from Agriculture

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