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Internal Quota‐Allocation Schemes and the Costs of the Mfa *
Author(s) -
Trela Irene,
Whalley John
Publication year - 1995
Publication title -
review of international economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.513
H-Index - 58
eISSN - 1467-9396
pISSN - 0965-7576
DOI - 10.1111/j.1467-9396.1995.tb00072.x
Subject(s) - economics , developing country , general equilibrium theory , microeconomics , international economics , economic growth
This paper suggests that schemes used within developing countries to allocate textile export quota among domestic producers typically have more severe negative effects on developing‐country economic performance than the MFA export quotas themselves. We summarize allocation schemes in 16 countries, highlighting common “lock‐in” and “rent‐dissipation” effects of such schemes. We then use a global general‐equilibrium model to evaluate the effects of MFA removal with and without these additional effects. Results indicate that estimates of gains to developing countries from an MFA removal increase sharply when internal quota‐allocation schemes are taken into account.