Coordinated Tax-Tariff Reforms, Informality, and Welfare Distribution

The paper studies the revenue, efficiency, and distributional implications of a simple strategy of offsetting tariff reductions with increases in destination-based consumption taxes so as to leave consumer prices unchanged. We employ a dynamic micro-founded macroeconomic model of a small open developing economy, which features an informal sector that cannot be taxed, a formal agricultural sector, and an import-substitution sector. The reform strategy increases government revenue, imports, exports, and the informal sector. In contrast to Emran and Stiglitz (2005), who ignore the dynamic effects of taxes and tariffs on factor markets, we find an efficiency gain, which is unevenly distributed. Existing generations benefit more than future generations, who (depending on pre-existing tax and tariff rates and the informal sector size) even may become worse off

Can Cleaner Environment Promote International Trade? Environmental Policies as Export Promoting Mechanisms

We examine whether environmental protection enhances international trade in a model of an international duopoly where production uses a depletable resource and generates cross-border pollution, and firms export their output to a world-market. Governments control pollution via either an emission tax, with revenue being used either to finance public pollution abatement or being refunded to the emitting firm contingent on reducing the cost of private pollution abatement (revenue-recycling), or an environmentally related standard. We evaluate these policies in terms of promoting exports, conserving the endowment of the natural resource, reducing pollution, and enhancing welfare. Our results indicate that in most cases, (1) revenue recycling is an export-contracting but resource preserving policy which also encourages firms\u2019 pollution abatement activity, (2) public pollution abatement is an export-promoting but resource depleting policy. When the public sector is efficient in abating pollution, then overall pollution level across countries is lower compared to their level under tax-revenue recycling. Both policies entail ambiguous welfare effects. Environmental standards relative to public abatement is an export-contracting but resource preserving policy. Relative to revenue recycling work in the opposite way; they are always, however, welfare-enhancing

Environmental Funds, Public Abatement, and Welfare

Environmental funds, Public abatement, Welfare, Pollution taxes, Tariffs, Jointly optimal taxes, F18, H23, Q58,

International migration, welfare and the provision of public goods

SIGLEAvailable from British Library Document Supply Centre-DSC:3597.9512(CEPR-DP--1500) / BLDSC - British Library Document Supply CentreGBUnited Kingdo

Cross-Border Pollution, Terms of Trade, and Welfare

Cross-border pollution, Strategic spillover, Emission taxes, Terms of trade, Globalization, Welfare, Q28, H23,