The (Non‐) Equivalence of Quantitative Restrictions

Abstract

Research on country‐specific import quotas (CSQs), whereby an aggregate quota quantity is allocated to specific exporting nations, has been overlooked despite the fact that they are empirically relevant. This article demonstrates that the economic effects of CSQs may differ markedly from those of voluntary export restraints (VERs) and aggregate import quotas (AQs). For example, CSQs may result in higher domestic prices and lower import quantities than AQs. Moreover, profits of foreign exporters under CSQs may actually increase relative to free trade. Recognition of these differences by policy makers is of particular importance in the light of the fact that these particular quantitative restrictions are viewed as policy substitutes.

Citation

Herander, M.G. (1986), "The (Non‐) Equivalence of Quantitative Restrictions", Journal of Economic Studies, Vol. 13 No. 4, pp. 64-73. https://doi.org/10.1108/eb002634