Credibility and the Cost of Export Subsidies

December 1, 1991

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Format: Chicago

Willy A Hoffmaister. Credibility and the Cost of Export Subsidies, (USA: International Monetary Fund, 1991) accessed December 3, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

Recurring balance of payments crises in countries that pursued import substitution have led some of them to establish a variety of export incentives, in particular subsidies, as a way to revive and re-orient their economies. However, exporters are likely to be uncertain of the government’s commitment to export promotion because of the years of neglect. This paper analyzes the issue of the credibility of export subsidies and suggests that a government is able to convince exporters of its commitment only at a cost, which reduces the attractiveness of promoting exports by means of subsidies.

Subject: Export competitiveness, Export subsidies, Exports, Financial institutions, International trade, Stocks, Trade policy

Keywords: Capital stock, Export competitiveness, Export preference, Export subsidies, Export target, Exports, High-export government, Low-export government, Stocks, Supply curve, Target ratio, Trade policy, WP

Publication Details

Pages:

44
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 1991/129
Stock No:

WPIEA1291991
ISBN:

9781451855081
ISSN:

1018-5941

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