Illusory revenues: import tariffs in resource-rich and aid-rich economies

Paul Collier, Anthony J. Venables

Research output: Contribution to journalArticleResearchpeer-review

12 Citations (Scopus)

Abstract

Where imports are financed predominantly by rents from resource extraction or aid the revenue generated by tariffs is illusory. Revenue earned by the tariff is offset by a reduction in the real value of aid and resource rents. Revenue is however moved between accounts in the government budget which, in the case of aid, may reduce the burden of donor conditionality. We demonstrate this proposition for a simple central case and show that the result is not overturned by generalisations around this case. We argue that trade policy formulation in such economies should recognize the illusory nature of tariff revenues.

Original languageEnglish
Pages (from-to)202-206
Number of pages5
JournalJournal of Development Economics
Volume94
Issue number2
DOIs
Publication statusPublished - Mar 2011
Externally publishedYes

Keywords

  • Aid
  • Import tariffs
  • Natural resources

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