TY  - JOUR
AU  - Spencer,Barbara J.
TI  - Quota Licenses for Imported Capital Equipment: Could Bureaucrats Ever DoBetter than the Market?
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 5695
PY  - 1996
Y2  - August 1996
UR  - http://www.nber.org/papers/w5695
L1  - http://www.nber.org/papers/w5695.pdf
N1  - Author contact info:
Barbara J. Spencer
University of British Columbia
Sauder School of Business
2053 Main Mall
Vancouver, BC  V6T 1Z2
CANADA
Tel: 604/822-8479
Fax: 604/822-8477
E-Mail: barbara.spencer@sauder.ubc.ca
AB  - Despite valid criticisms, many developing countries have issued non-transferable import licenses to a limited number of final-good producers so as to restrict imports of an input capital equipment.  This paper demonstrates that for a given import quota, such licensing restrictions can actually increase domestic production of both the input and the final product, but at the cost of reduced quota rents.  Under pure competition, domestic welfare falls relative to the use of marketable quota licenses, but if foreigners would get the quota rents, or if external economies cause decreasing costs, then bureaucratic allocation can dominate.
ER  -