Trade diversion and declining tariffs : evidence from Mercosur

  title={Trade diversion and declining tariffs : evidence from Mercosur},
  author={Alok K. Boharaa and Kishore Gawandeb and Pablo Sanguinettic},
  • Alok K. Boharaa, Kishore Gawandeb, Pablo Sanguinettic
  • Published 2016
This paper empirically examines the alternative posed by Richardson [J. Intern. Econ. 34 (1993) 39] to the traditional view that trade integration may exacerbate inefficiencies. Richardson’s hypothesis boldly predicts that trade diversion (and trade creation) 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… CONTINUE READING