Title

The theory of trade policy and reform

Date of this Version

10-3-2011

Document Type

Book Chapter

Publication Details

Citation only.

Falvey, R., & Kreickemeier, U. (2011). The theory of trade policy and reform. In D. Bernhofen, R. Falvey, D. Greenaway & U. Kreickemeier (Eds.), Palgrave handbook of international trade (pp. 265-294).

Access the publisher's website.

2011 HERDC submission. FoR code: 140210

© Copyright Rod Falvey & Udo Kreickemeier, 2011

ISBN

978-0-230-21727-0

Abstract

Extract:
Historically, trade taxes have been an important source of government revenue in subsistence-oriented economies with large informal sectors. As countries developed and economic activity became more market-oriented, governments sourced revenue frorn broader, more efficient tax bases. But trade taxes remained, with protection of domestic import-competing activity, rather than revenue, becoming their primary motivation. This shift of motivation also facilitated the substitution of alternative policies, quantitative restrictions for example, which would limit import competition without necessarily generating revenue.

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This document has been peer reviewed.