The Laffer curve for tariffs


“When tariffs come down, tariff revenue tends to go up.” – EU Commissioner Peter Mandelson urging ACP countries to liberalize.

There does seem to be some evidence supporting this claim, such as this early 1990s paper by Lant Pritchett and Geeta Sethi. Is there anything more to suggest that ACP countries really are to the right of the revenue-maximizing tariff rate?

Speaking of the Laffer curve for tariffs, check out Doug Irwin’s work on the 1880s debate in the United States.

[HT: Singleton]