Trade reform in a corrupt economy : A note

Mandal, Biswajit (2009): Trade reform in a corrupt economy : A note.

Abstract

We construct a general equilibrium model and analyze the effectiveness of trade reform in a distorted economy where distortion exists in form of bureaucratic corruption that arises because of trade protection at the border. In this kleptocratic set up, intermediaries are employed in order to run off from paying a part of import tariff. We use HOSV kind of framework to prove that whether trade liberalization necessarily helps reducing corruption activities and to check what happens to the production of commodities.

• Item Type: MPRA Paper
• Language: English
• Keywords: Corruption; International Trade; Tariff Reform; General Equilibrium
• Subjects: D - Microeconomics > D7 - Analysis of Collective Decision-Making > D73 - Bureaucracy ; Administrative Processes in Public Organizations ; Corruption; D - Microeconomics > D5 - General Equilibrium and Disequilibrium; F - International Economics > F1 - Trade > F11 - Neoclassical Models of Trade; F - International Economics > F1 - Trade

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