NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Political-Economy Arguments for a Uniform Tariff

Arvind Panagariya, Dani Rodrik

NBER Working Paper No. 3661
Issued in March 1991
NBER Program(s):   ITI   IFM

Uniform tariffs have become increasingly popular in recent years, yet their economic rationale is not strong. We identify and evaluate three sets of reasons as to why governments may prefer tariff uniformity as a means of alleviating political motives for excessive protection. First, a free-rider effect may be conducive to less lobbying under a uniform tariff regime than under a regime in which tariffs are allowed to differ. Second, an input-price effect may dampen the enthusiasm of final-goods producers for import protection. Third, a precommitment effect may increase the cost to a future government of protecting favored sectors. None of these arguments provides an unambiguous, airtight case for tariff uniformity. The decision on uniformity has to be made on a case-by-case basis.

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Document Object Identifier (DOI): 10.3386/w3661

Published: International Economic Review, August 1993 citation courtesy of

 
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