Anderson reviews the notion of the "captured" regulatory agency and summarizes four theories for how it occurs. The author then uses the example of the newly formed Texas Public Utility Commission to demonstrate none of the four apply; that the regulators became "enraptured" with the interests...

Gravity equations have been widely used to infer trade flow effects of various institutional arrangements. We show that estimated gravity equations do not have a theoretical foundation. This implies both that estimation suffers from omitted variables bias and that comparative statics analysis is...

This article presents a general equilibrium two-country Ricardian trade model with endogenous transactions costs that arise from individual utility-maximizing allocation of labor to production and piracy. In the absence of institutions for risk sharing and coordination of defense, autarky...

This paper surveys the measurement of trade costs: what we know and don't know but may usefully attempt to learn. Partial and incomplete data on direct measures of costs go with inference on implicit costs from trade flows and prices. Total trade costs in rich countries are large. The ad valorem...

Agricultural markets in Mexico, as elsewhere, are distorted by domestic subsidies as well as international trade policies. To measure domestic distortions in agriculture and compare them internationally, analysts have used"producer subsidy equivalent"(a production-share weighted average of...

The recent public economics literature involves an apparent consensus that income effects reduce the costs of raising revenues and hence increase the desirable level of public good provision. Higher taxes can indeed reduce the demand for leisure -- and hence increase the supply of taxed labor --...

Corruption and imperfect contract enforcement dramatically reduce international trade. This paper estimates the reduction using a structural model of import demand in which insecurity acts as a hidden tax on trade. We find that inadequate institutions constrain trade as much as tariffs do. We...

For a single tariff, the height of the tariff is an unambiguous measure of the policy's restrictiveness. With more than one tariff, theory has not provided an extension that captures the idea of the tariff's height, so analysts have used index numbers such as the mean and the coefficient of...

Anderson and Martin provide simple, robust rules for evaluating public spending in distorted economies. Their analysis integrates, within a clean unified framework, previous treatments of project evaluation as special cases. In this paper, the authors use a general system of fiscal accounting...

Trade is affected not only by taxes and subsidies that affect producers and consumers of goods, but also, indirectly, by taxes and subsidies that affect nontraded goods or factors of production. The authors show how the Trade Restrictiveness Index (TRI) may be extended to incorporate these types...