Rent-Extracting Tariffs and the Management of Exhaustible Resources
The paper examines the interaction between a resource-exporting and a resource-importing country. The exporter chooses an optimal depletion rate and decides the allocation of the extracted resource between exports and domestic use. Optimal management from a national view entails inefficiency from a global perspective because too little resource is exported since the supplying country exploits its monopoly power. The importing country, however, has incentive to extract some of the resource rent with a tariff. The optimal tariff induces greater overall inefficiency.
Year of publication: |
1982
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Authors: | Brander, James ; Djajic, Slobodan |
Institutions: | Economics Department, Queen's University |
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