Quota Licenses for Imported Capital Equipment: Could Bureaucrats Ever DoBetter than the Market? / Barbara J. Spencer.

Format:

Book

Author/Creator:

Spencer, Barbara J.

Contributor:

National Bureau of Economic Research.

Series:

Working Paper Series (National Bureau of Economic Research) no. w5695.

NBER working paper series no. w5695

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Quota Licenses for Imported Capital Equipment

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1996.

Summary:

Despite valid criticisms, many developing countries have issued non-transferable import licenses to a limited number of final-good producers so as to restrict imports of an input capital equipment. This paper demonstrates that for a given import quota, such licensing restrictions can actually increase domestic production of both the input and the final product, but at the cost of reduced quota rents. Under pure competition, domestic welfare falls relative to the use of marketable quota licenses, but if foreigners would get the quota rents, or if external economies cause decreasing costs, then bureaucratic allocation can dominate.

Notes:

Print version record

August 1996.