Trade Policy Reform How to implement trade liberalization as part of a and Poverty Alleviation strategy for alleviating poverty in developing countries

Content Provider	Semantic Scholar
Author	Hoekman, Bernard Michalopoulos, Constantine Schiff, Maurice L. Tarr, David G.
Copyright Year	2002
Abstract	ing from fiscal revenue considerations, barriers to trade are typically put in place to protect domestic producers from international competition, and usually benefit powerful interest groups, not the poor. Non-tariff barriers are especially pernicious in this regard as they result in the transfer of rents from consumers broadly, including the poor, to license holders. Such rents arise because the restriction on imports results in domestic prices that are above the world price. Whereas in the case of a tariff the government collects the revenue that is implied by the difference between the world price and the tariff-inclusive domestic price, in the case of non-tariff barriers this implicit revenue is captured by those who have the right (hold the license) to import. There is evidence that in developing countries such rents are a major source of inefficiency from rent-seeking activity (Krueger, 1974), i.e., from the spending of real resources to obtain import licenses and influence policy in general. These license holders are often among the wealthiest members of society. Thus, in addition to the inefficiency costs of trade protection, protection will often transfer income toward the rich and away from the poor. Indeed, in 6 One view, represented by Rodriguez and Rodrik (2000), is that there is a strong association between exports and growth, but that we are unable to be sure whether this association is a consequence of exports causing output growth, or of the two being jointly determined by the strength of countries' institutions. Even if we were to accept this agnostic view, the resulting policy prescription is a relatively comprehensive approach to development that includes improvement of a range of institutions along with trade liberalization.
File Format	PDF HTM / HTML
Alternate Webpage(s)	http://documents.shihang.org/curated/zh/160381468780327490/pdf/multi0page.pdf
Language	English
Access Restriction	Open
Content Type	Text
Resource Type	Article