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REDUNDANT TARIFFS AS RATIONAL ENDOGENOUS PROTECTION
Author(s) -
Feldman David H.
Publication year - 1993
Publication title -
economic inquiry
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.823
H-Index - 72
eISSN - 1465-7295
pISSN - 0095-2583
DOI - 10.1111/j.1465-7295.1993.tb01303.x
Subject(s) - tariff , economics , politics , product (mathematics) , international economics , microeconomics , international trade , law , political science , geometry , mathematics
Redundant protection, tariffs that exceed the domestic import‐price differential, is an important feature of nineteenth century U.S. tariff history and remains a common practice in many developing countries. This paper develops political‐economy models of the tariff setting process when the world price of the importable product is stochastic. The optimal endogenous tariff may involve redundant protection even if agents are risk neutral. These political‐economy models also permit us to assess the comparative static effects of changes in the mean‐preserving spread of the world price under differing assumptions about the political process.