The (Normative) Efficiency Ranking of Output and Export Subsidies under Costly and Imperfect Enforcement

This paper relaxes the assumption of perfect and costless policy enforcement implicit in traditional analysis of output and export subsidies and introduces enforcement costs and cheating into the economic analysis of these policy instruments. Analytical results show that compliance with policy rules is not the natural outcome of self-interest and complete deterrence of cheating is not economically efficient. The introduction of enforcement costs and cheating changes the welfare effects of the policy mechanisms, their efficiency in redistributing income to producers, and their normative ranking in terms of transfer efficiency.


Editor(s):
Giannakas, Konstantinos
Issue Date:
2000-01
Publication Type:
Conference Paper/ Presentation
PURL Identifier:
http://purl.umn.edu/123651
Total Pages:
19




 Record created 2017-04-01, last modified 2017-08-26

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