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The Cost of Export Subsidies: Evidence From Costa Rica
Author:
Mr. Willy A Hoffmaister
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Series:
IMF Working Papers
Volume/Issue:
Volume 1991: Issue 094
Language:
English
Publication Date:
01 Oct 1991
DOI:
https://doi.org/10.5089/9781451950670.001
ISBN:
9781451950670
ISSN:
1018-5941
Pages:
36
Keywords:
WP; export subsidy; supply curve; anti-export bias; export contract; export incentive; export revenue; baseline export; export supply; export promotion policy; supply response; Export subsidies; Exports; Export earnings; Depreciation; Exchange rates
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IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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This paper develops a model to estimate the effects of export subsidies on the supply of exports. Using data for Costa Rica over the 1980’s, it is shown that while the export subsidy scheme in operation led to an increase in exports, the direct fiscal costs of the scheme were quite large. Furthermore, the subsidy scheme led to a significant increase of imports. These results suggest that elimination of export subsidies would not have a particularly harmful effect on the trade balance, and would increase the fiscal position and generate economic efficiency besides.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund
Volume 1991: Issue 094