REVENUE ENHANCING TARIFF REFORM

Programmes of gradual trade policy reform have been included in most of the structural adjustment packages adopted by developing countries. S far the literature on piecemeal trade policy reform has concentrated on finding reform programmes that improve the welfare of a representative individual. Yet trade taxes are an important source of government revenue in many developing countries. This paper therefore examines tariff reform programmes that are both welfare improving and revenue enhancing. It first determines general conditions under which such a reform will exist and then considers specific reforms of both single tariffs and groups of tariffs. The standard welfare improving reform programmes - proportional and concertina reforms - are also discussed. JEL No. F13