Productivity- and Pareto-Improving Changes in Taxes and Tariffs

The paper investigates the problem of tariff reform in a small open multi-household economy that only has tariffs and domestic commodity taxes as policy instruments. The concept of a productivity improvement in tariffs and taxes is introduced and conditions for its existence are established. We prov...

Full description

Saved in:
Bibliographic Details
Published in:The Review of economic studies 1989-04, Vol.56 (2), p.199-215
Main Authors: Diewert, W. E., Turunen-Red, A. H., Woodland, A. D.
Format: Article
Language:English
Subjects:
Commodities
Economic theory
Income taxes
Lump sum payments
Pareto improvement
Productivity
Productivity improvement
Tariff reform
Tariffs
Tax policy
Taxation
Taxes
Citations: Items that cite this one
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:The paper investigates the problem of tariff reform in a small open multi-household economy that only has tariffs and domestic commodity taxes as policy instruments. The concept of a productivity improvement in tariffs and taxes is introduced and conditions for its existence are established. We prove that a Pareto-improving change in tariffs and domestic taxes exists if a productivity-improving change in tariffs exists and if the Weymark condition on the matrix of household demands holds. Conditions are established for particular tariff reforms, such as proportional reductions and reductions of extreme rates, to yield Pareto improvements in welfare.
ISSN:0034-6527
1467-937X
DOI:10.2307/2297457