The Theory of Political Tariff Protection for Agricultural Sector in Developing Countries

This paper aims to analyze tariff protection policies in the agricultural sector of developing countries. The agricultural tariff structure in developing countries is characterized by: i) high average tariffs, ii) the existence of tariff escalation, iii) dispersion of nominal tariffs across tariff lines, and iv) a wide gap between average nominal tariffs and import-weighted average tariffs. Consequently, some features can be extracted that are consistent with the observed patterns of tariff protection in developing countries: i) escalation of nominal tariff rates with the degree of processing, ii) higher average tariffs in the agricultural sector compared to agriculture in developed countries, and iii) higher non-agricultural than agricultural tariff protection. Here the Theory of Political Tariff Protection for Agricultural Sector in developing countries is described. This theory allows us to identify two sets of products. Agricultural products for which tariffs are higher than their political fitted values, therefore, tariff cuts should occur in a long period of time and for which tariffs are higher than their political fitted values therefore tariff reductions would not be politically costly.