UNIGE document Professional Article
previous document  unige:55449  next document
add to browser collection

The protectionist bias of duty drawbacks: evidence from Mercosur

Cadot, Olivier
Published in Journal of International Economics. 2003, vol. 59, no. 1, p. 161-182
Abstract In a political-economy setting where tariffs and duty drawbacks are endogenously chosen through industry lobbying, it is shown that full duty-drawbacks are granted to exporters who use imported intermediates in their production. This in turn decreases their incentives to counter-lobby against high tariffs on their inputs. In equilibrium, higher tariffs will be observed on these goods. The creation of a regional block will change the political equilibrium. Duty-drawbacks will be eliminated on intra-regional exports, which in turn will lead to lower tariffs for goods used as inputs by intra-regional exporters. Evidence from Mercosur suggests that the elimination of duty-drawbacks for intra-regional exports led to increased counter-lobbying by users of intermediate products. In its absence the common external tariff would have been on average 3.5 percentage points (25 percent) higher.
Keywords Duty-drawbacksPolitical-economy MercosurNew regionalism
Full text
(ISO format)
CADOT, Olivier, DE MELO, Jaime, OLARREAGA, Marcelo. The protectionist bias of duty drawbacks: evidence from Mercosur. In: Journal of International Economics, 2003, vol. 59, n° 1, p. 161-182. doi: 10.1016/S0022-1996(02)00084-3 https://archive-ouverte.unige.ch/unige:55449

336 hits

1 download


Deposited on : 2015-04-12

Export document
Format :
Citation style :