Redistribution, state trading enterprises and 'politically optimal' tariffs. (November 2013)

• Record Type: Journal Article
• Authors: McCorriston, Steve; MacLaren, Donald
• Is Part Of: Canadian journal of economics. Volume 46:Number 4(2013:Nov.)
• Page Start: 1351
• Page End: 1379
• Publication Date: 2013-11
• Subjects: Economics -- Periodicals; 330
• DOI: 10.1111/caje.12051
• Languages: English
• ISSNs: 0008-4085

Abstract

<abstract abstract-type="main" xml:lang="en"> <title>Abstract</title> <p>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.'</p> </abstract>