Trade diversion and declining tariffs: evidence from Mercosur

@inproceedings{Bohara2003TradeDA,
  title={Trade diversion and declining tariffs: evidence from Mercosur},
  author={Alok K. Bohara and Kishore Gawande and Pablo J. Sanguinetti},
  year={2003}
}
This paper empirically examines the alternative posed by Richardson (1993) to the traditional view that trade integration may exacerbate inefficiencies through trade diversion. Richardson’s hypothesis boldly predicts that trade diversion may actually cause tariffs to decline! The hypothesis is fundamentally attributable to the presence of a political component in the governments’ objective functions. A cross-sectionally rich data-set on trade and tariffs from the Mercosur-pact countries… CONTINUE READING
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