ABSTRACT

Some empirical studies have shown that many developing economies were unable to recover lost trade revenue from domestic taxes after implementing trade liberalizing policies. Ignoring the fiscal cost of trade liberalization when government spending is not completely wasteful may lead to misleading welfare estimates. We address these concerns by developing a model in which government spending augments the production function, enabling it to account for the role of revenue and its impact on welfare. The model is calibrated to capture the features of the Ghanaian economy. We find significant but lower welfare effects of trade liberalization when government spending on infrastructure plays an important role in the production process. The lower welfare impact of trade liberalization is explained by a decline in infrastructure spending caused by shortfalls in revenue emanating from tariff cuts. The implication of the study is that there are further welfare gains to trade liberalization but such gains are significantly reduced when fiscal costs are high. The role of revenue matters in evaluating the welfare implications of trade liberalization.

摘要

一些经验研究表明，在实施贸易自由化政策后，许多发展中经济体无法从国内税收中弥补失去的贸易收入。当政府支出没有完全浪费时，忽视贸易自由化的财政成本可能会导致误导性的福利估计。我们通过开发一种模型来解决这些问题，在该模型中，政府支出会增加生产功能，使政府能够考虑收入的作用及其对福利的影响。对该模型进行了校准，以捕捉加纳经济的特征。当政府在基础设施上的支出在生产过程中发挥重要作用时，我们发现贸易自由化对社会产生了重大但较低的福利影响。贸易自由化对福利的影响较低，可以归因于关税削减带来的收入不足，从而导致基础设施支出下降。该研究的含义是，贸易自由化还会带来更多的福利收益，但是当财政成本很高时，这种收益会大大减少。收入的作用在评估贸易自由化对福利的影响方面很重要。