The problem of choosing second-best trade policies is modified by including sector-specific policies as well as tariffs. We obtain conditions under which reduction of the largest tariff is welfare improving. Formulae for the optimal tariff and sector-specific subsidy are used to study the design...

A partial equilibrium model of stochastic crop production is used to analyze the environmental impacts of popular subsidized crop insurance programs. Land use is unchanged only when an actuarially fair, perfectly separating insurance contract is offered. For the more typical pooling equilibrium...