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Incidence theory and the shifting of protection across sectors: the South Asian experience

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Abstract:

Using the theoretical framework of a simple general equilibrium model, this paper examines whether strategies aimed at protecting or promoting manufacturing industries indirectly taxed the agricultural and service sectors. A panel data set consisting of five South Asian countries over a 26 year time period is employed in the analysis. Three different estimation procedures are used to account for factors that are country specific and those that are common to all countries. The results indicate that the agricultural sector indirectly felt the brunt of the net protection provided to manufactures due to the 'shifting of protection' across sectors. The service sector, on the other hand, indirectly benefited from the general equilibrium spillover effects.

Document Type: Research Article

DOI: http://dx.doi.org/10.1080/0003684022000015892

Affiliations: Roger Williams University, Gabelli School of Business, One Old Ferry Road, Bristol, RI 02809, USA E-mail: ppanday@rwu.edu

Publication date: January 1, 2003

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