Achieving Pareto Superiority Under Free Trade: An Alternative to the Dixit-Norman Scheme

This paper proposes a tax-cum-subsidy redistribution scheme which establishes the Pareto superiority of free trade over autarky in a stronger sense than the well-known Dixit-Norman scheme by ensuring that each consumer is better off under free trade prior to the distribution of the net revenue accru...

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Bibliographic Details
Published in:International economic journal 1988-12, Vol.2 (4), p.1-7
Main Authors: Casas, Francois R., Han, Jae-Dong
Format: Article
Language:English
Subjects:
Free trade
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Summary:This paper proposes a tax-cum-subsidy redistribution scheme which establishes the Pareto superiority of free trade over autarky in a stronger sense than the well-known Dixit-Norman scheme by ensuring that each consumer is better off under free trade prior to the distribution of the net revenue accruing to the government from the scheme. While the cost of its implementation may be higher than that of the Dixit-Norman proposal, the latter is likely to be perceived as more protectionist than the proposed alternative. [411]
ISSN:1016-8737
1743-517X
DOI:10.1080/10168738800000024