What do we want to know?

What is the evidence regarding the level of impact of tariff reductions on employment and tax revenue in developing countries?

What did we find?

We found that tariff reductions tend to reduce employment and trade taxes in the short-run. At the same time, more increases in the degree of openness in the economy tend to increase employment levels and government revenue. This supports the idea of adjustment costs in the short-run.

What are the implications?

The main policy implication of the review is the need to provide assistance for adjustment costs in terms of employment and tax revenue in the short run.

How did we get these results?

Based on a sample of 3,487 searched studies, we included 109 studies, 67 econometric and 42 Computable General Equilibrium simulations.

The EPPI Centre reference number for this report is 1907. This review should be cited as:

Cirera X, Willenbockel D, Lakshman R (2011) What is the evidence of the impact of tariff reductions on employment and fiscal revenue in developing countries? Technical report. London: EPPI Centre, Social Science Research Unit, Institute of Education, University of London.

ISBN: 978-1-907345-12-8