We consider an economy where production generates externalities, which can be reduced by additional firm level expenditures. This requires firms to raise outside financing, leading to deadweight loss due to a standard agency problem vis-à-vis outside investors. Policy is constrained as firms...

Optimal tax theory has difficulty rationalizing high marginal tax rates at the upper end of the income distribution. In this paper, I construct a model of optimal income taxation in which agents' preferences are interdependent. I derive a simple expression for optimal taxes that accommodates...

We analyze the effects of a generalized class of negative consumption externalities (asymmetric and non-atmospheric) on the structure of efficient commodity tax programs. Households are not only concerned about consumption reference levels — that is, they gain utility from “keeping up with...

Laos benefits from the ASEAN-Australia-New Zealand Free Trade Area (AANZFTA). The Agreement has eliminated tariffs on 90% of Australia’s and New Zealand’s imports, with the remaining tariff lines to be removed by 2020. For Laos, it provides for a much longer transition period for eliminating...

China is the second most important export destination of Laos, and export growth to that market has far outpaced exports to Thailand, the leading export destination. One of the major drivers of this growth is the comprehensive ASEAN-China Free Trade Agreement (ACFTA) under which Lao benefits in...

Laos benefits from the ASEAN-India Free Trade Agreement in Goods (AIFTA) by gaining preferential access to the large Indian market. Under the Agreement, India commits to eliminating customs duties on imports for 90% of its tariff lines under two separate lists: one being completed by the end of...

Laos benefits from the comprehensive ASEAN-Korea Free Trade Agreement (AKFTA), which in large part has supported the fast growing exports of Laos to Korea. Since Laos became a member of ASEAN in 1997, its exports destined for Korea have increased 10-fold. That expansion is nearly twice as large...

The ASEAN-Japan Comprehensive Economic Partnership Agreement (AJCEP) offers duty-free treatment on most of Japan’s imports to Lao producers and exporters. This type of preferential treatment has contributed to the rapid rise of Lao exports to that country – nearly 30% a year in the last...

The paper purports to examine the rationale in subsidizing healthcare in the developing economies solely from the standpoint of economic growth with the help of a three-sector, full-employment small economy model with exogenous labour market imperfection and a non-traded sector providing...