Redistribution,state trading enterprises and ‘politically optimal’ tariffs |
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Authors: | Steve McCorriston Donald MacLaren |
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Affiliation: | 1. Department of Economics, University of Exeter;2. Department of Economics, University of Melbourne |
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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.’ |
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Keywords: | F12 F13 |
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