The gains from duty free zones

• 成果类型: Article
• 署名作者: Facchini, G; Willmann, G
• 署名单位: Stanford University
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/S0022-1996(98)00068-3
• 发表日期: 1999
• 页码: 403-412
• 关键词: Pareto gains from trade; duty free zones

摘要

Duty free zones have been established in many countries and duty free shops can be found in every major international airport. This paper investigates their welfare effect, in the tradition of the Pareto gains from trade literature. Using the dual approach developed in Dixit and Norman (1980), we show that the introduction of a duty free zone leads to Pareto gains over autarky. Compared to free trade, its welfare impact depends on the redistribution mechanism accompanying free trade. We show that with a Dixit-Norman tax scheme free trade is Pareto-inferior to a duty free zone regime. The opposite holds true for lump sum redistribution. (C) 1999 Elsevier Science B.V. All rights reserved. JEL classification: F10; F11.