The aggregate efficiency of such reforms is based on comparisons of simple summary measures of the Marginal Cost of Funds of the various tariff or quota changes with the Marginal Cost of Funds of the alternative taxes, or of the Marginal Benefit of Government supplied goods. The aggregate efficiency of tariff liberalization is dubious, while quota liberalization is more likely to be efficient.
Social welfare rises with aggregate efficiency unless distribution effects are perverse.
Plausible sufficient conditions for non-perverse distributional effects are provided. The results frame a diagnostic method for sensitivity analysis in evaluations of trade and tax policies. Before downloading any of the electronic versions below you should read our statement on copyright . Download GhostScript for viewing Postscript files and the Acrobat Reader for viewing and printing pdf files.