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Redistribution, state trading enterprises and ‘politically optimal’ tariffs
Author(s) -
McCorriston Steve,
MacLaren Donald
Publication year - 2013
Publication title -
canadian journal of economics/revue canadienne d'économique
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.773
H-Index - 69
eISSN - 1540-5982
pISSN - 0008-4085
DOI - 10.1111/caje.12051
Subject(s) - tariff , redistribution (election) , ambiguity , economics , perspective (graphical) , redistribution of income and wealth , state (computer science) , microeconomics , international economics , public economics , computer science , political science , law , public good , politics , algorithm , artificial intelligence , programming language
Abstract State trading enterprises (STEs) are widely used and can be viewed as instruments of trade policy. We analyse two aspects: the first is their potential trade distorting effect; the second is how they modify the case for the ‘politically optimal’ tariff. We show that the STE can reduce the need for a tariff designed for domestic redistribution. This result introduces some ambiguity about how STEs are interpreted: from a multilateralist perspective, they should be dealt with in the same way as other non‐tariff barriers; from a nationalistic perspective, they can reduce the need for ‘politically optimal.’