Premium
Simultaneous Reform of Tariffs and Quotas
Author(s) -
Neary J. Peter
Publication year - 2007
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.1467-9396.2006.00637.x
Subject(s) - economics , economic rent , welfare , international economics , microeconomics , market economy
This paper presents a general result for simultaneous reform of tariffs and quotas in a small open economy, where some of the quota rents do not accrue to domestic residents. Absent highly perverse income effects, welfare must rise following a uniform proportionate reduction in tariffs and a uniform proportionate relaxation of quotas, weighted by their rent‐retention parameters. Previous results are shown to be special cases of this one, and its implications for practical policy advice and its relationship with the policy of “tariffication” of quotas are discussed.