In this paper, we examine optimal tax/subsidy policies with export marketing boards that compete as oligopolists in world markets. By taking a targeting approach to identifying optimal policies, we are able to show how optimal policies vary with the objectives of board, the nature of competition in world markets, as well as assumptions about market segmentation and regulation. In none of the cases examined does a marketing board without tax/subsidy policy replicate the social optimum. Moreover, we show that the policies necessary to attain the social optimum are quite different with the institutional variation considered. Arbitrage and regulation is the only case considered in which the optimal export policy is definitely a tax and in which the marketing board's objective does not affect policy.
All Science Journal Classification (ASJC) codes
- Economics and Econometrics