Citation

Discussion Paper Details

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Title: Green Policies in a Small Open Economy

Author(s): A Lans Bovenberg and Frederick van der Ploeg

Publication Date: May 1993

Keyword(s): Capital, Environmental Externalities, Excess Burden, Natural Resources, Public Abatement Employment and Small Open Economy

Programme Area(s): International Macroeconomics

Abstract: In this paper we develop techniques for measuring the trade policy equivalent of domestic distortions, using a distance function approach. Our measure, the Trade Restrictiveness Index, is shown to equal the uniform tariff which is welfare-equivalent to a given pattern of domestic taxes and subsidies. We extend the Index to incorporate taxes on non-traded goods and factor markets and illustrate its operationality with an application to liberalization in Mexican agriculture. We conclude that our Index has considerable potential in empirical work and as an aid to trade negotiators.

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Bibliographic Reference

Bovenberg, A and van der Ploeg, F. 1993. 'Green Policies in a Small Open Economy'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=785