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In this paper the authors present an interpretive discussion of the scope for management scientists to make a more effective contribution to improving the performance of the Canadian economy, by active involvement in management and decision making in Canadian institutions, both private and public. Initially the paper surveys the evidence on the differences in economic performance between Canada and the United States, outlining the methods used, and the results. Some factors turn out to be relatively unimportant in the differences, while others are quite crucial. In the broad area of manufacturing, the gap in economic performance is particularly wide. Tariffs in Canada and other countries have become important contributions to the existing product diversity, short production runs, high cost and low productivity in relation to performance in other countries. A further important area is the pattern of decision making in Canada which has led to a survival strategy and resistance to change rather than innovation, creativity and risk taking. This tends to perpetuate the lower levels of productivity found to exist. In the light of this analysis of economic factors and decision making, the paper makes some broad recommendations on the role of management scientists, the need for change in management style, and changes in tariffs that would accelerate change and would recognize the importance of interdependence for more efficient performance. The paper concludes on the theme "The Time is Now!". [ABSTRACT FROM AUTHOR]

This article presents the response of the author to the comments of Bela Balassa on his article concerning tariffs, intermediate goods and domestic protection. The author disputes the conclusions made by Balassa wherein he merely focused on the second-best optimum for a given consumption distortion. The author noted that Balassa is also confused over the role of the definition of effective tariff. It is notable that the important contribution of Balassa's paper is that he forces upon us the realization that for the model proposed in the author's second-best optimum requires equality of all effective tariff rates. Finally, it is concluded that effective tariffs influence the pattern of resource allocation and must be considered in any theory of protection but to announce such definition is not to announce a theory of protection.

The purpose of a recent paper by Herbert Grubel and Peter Lloyd was to examine the nature and magnitude of the bias introduced by the neglect of factor substitution between produced and primary inputs when calculating effective rates of protection (ERP). They concluded that the bias from neglecting substitution possibilities between produced and primary inputs is usually small. The purpose of this paper is to make three comments on their conclusions. Firstly, there is an error, or possibly a misprint, which can be misleading. Secondly, because Grubel and Lloyd restrict their calculations to a narrower range of parameter values than is empirically reasonable their results understate the magnitude of the bias which one might reasonably expect to encounter in empirically grounded calculations. Thirdly, Grubel and Lloyd conclude that "the bias from neglecting substitution possibilities is usually small" without discussing criteria for determining when a bias becomes significant, it is shown here that the magnitude of the bias encountered when using empirically relevant data is very significant because the ranking of production processes by their calculated ERP can vary greatly with biased estimates. These comments have significant implications for the notion that the elasticity of substitution is not an important parameter in calculating the ERP. [ABSTRACT FROM AUTHOR]

This article focuses on the capital mobility in a tariff-ridden economy. The article maintains that the investigations in both directions have been vitiated by an oversight regarding the full implications of the peculiar conceptualization of capital mobility upon which the results hinge. Capital mobility in a tariff-impeded economy is conceived to mean that goods which move as returns to overseas capital are unaffected by the tariffs levied on goods secured through trade. But if capital is mobile in this strong sense, then capital mobility can be shown to be a substitute for trade under much weaker assumptions than previously recognized. This paper is therefore submitted as a contribution to a more adequate conceptualization of capital mobility.

This article focuses on the result of a study which argued that customs union is necessarily inferior to an appropriate policy of non-preferential protection. This conclusion the authors maintain, emerges naturally from the separation of the effect of customs union into two exhaustive components, the tariff reduction component and the pure trade diversion component. The objective of this paper is to investigate the relevance of changes in the terms of trade. A Marshallian partial-equilibrium model was employed by the author in order to develop the argument. The author of this article discussed the terms-of-trade effect of the customs union.

This paper uses empirical evidence to examine the proposition advanced by economist Lawrence B. Krause that the establishment of the Common Market will seriously harm U.S. exports because "dominant suppliers" in European Economic Community (EEC) countries receive increased protection from the averaging of national tariffs. Subsequently, the results are used to reinterpret the traditional conclusions regarding the effects of tariff reductions on the domestic economy, and additional tests are offered to indicate the predominance of intraindustry-as against interindustry-specialization in trade in manufactures among the industrial countries. Upon finding that, in the case of dominant suppliers, national duties are generally lower than the common external tariff, Krause claims that "a comparison of the new EEC tariff for each commodity group with the former national tariff of the leading exporting country in intra-Community trade of each product gives the vivid impression that the new EEC tariff is much more protective than the old national tariff.

International trade theorists have been almost alone in considering seriously the question of devising the optimal economic policy when social utility, defined as a function of the currently available flow of goods and services, cannot take the maximum value that is attainable within the framework of technological, resource and trading opportunities, owing to constraints provided by "non-economic" objectives. Four major varieties of non-economic objectives can be distinguished: (1) the output level in specific activities may be considered to be of strategic importance and hence may not be allowed to fall below specified magnitudes; (2) self-sufficiency, that is, the value of imports (or exports, under balanced trade), may be considered to be sufficiently strategic to entail that its level not exceed a specified magnitude; (3) factor employment in certain activities, for example labour in agricultural activities, may be considered vital for defence or "national character" and hence may not be allowed to fall below specified levels; and finally (4) domestic availability of certain commodities may be considered to be relevant to "social policy", requiring that it not exceed certain specified levels, as for example with "luxury" consumption. In each of these cases, the question of maximizing social utility becomes a problem in the theory of the second-best, for each such non-economic objective constitutes an additional constraint subject to which the social utility function would be maximized. And corresponding to each such constrained solution, there is an optimal form of policy intervention that will enable a competitive system to maximize social utility. This paper is addressed to an analysis of the optimal policies, when the economist is faced with these non-economic objectives (each taken in turn, during the ensuing analysis). Throughout, the model assumed involves two primary factors, two final outputs, production functions embodying constant returns to scale and diminishing returns along isoquants, a well-behaved concave social utility function, and fixed supplies of factors of production. In Section I, it is also assumed that there is no monopoly power in trade, so that the external terms of trade are fixed throughout the analysis. This assumption is relaxed in Section II. The analysis involves the derivation of necessary (and under our assumptions, sufficient) conditions for a solution to the constrained maximum problem implicit in each case. However, all cases in Section I are illustrated diagrammatically as well, so as to bring out the essence of the analysis more clearly. It can be shown that an optimum solution exists in all cases, and the analysis will be devoted to a characterization of the optimum solution. [ABSTRACT FROM AUTHOR]

A country may impose a tariff upon its imports by levying the tariff in ad valorem or in specific form. This represents a choice between distinct tariff policies, and yet has never been taken into account by the literature on the theory of tariffs. The scope of this paper is limited to an examination of the choice between these tariff policies in the light of optimum tariffs and retaliation. [ABSTRACT FROM AUTHOR]

This article presents comments on the article by Roy Ruffin concerning tariffs, intermediate goods and domestic protection. The author opposes the assertion of Ruffin that the new conclusions reinforce rather than contradicts the results and that Ruffin adopted the Barber-Johnson-Balassa measure of effective protection. Furthermore, the author contradicts Ruffin's suggestion that eliminating protection does not necessarily make a country better off. Finally, Ruffin's conclusion on the possibility of reaching the free trade production point where the effective tariff is said to be unbiased and efficient is irrelevant.

This article examines the transport costs and the static welfare costs of tariffs. The object of tariff policy is to raise the domestic price of foreign goods to give an advantage to domestic suppliers. An f.o.b. tariff applies to the price in the foreign country, while the c.i.f. tariff is applied inclusive of international transport costs. The domestic selling price will also include any domestic transport costs and any non-transport costs associated with movement. Generally, the possibilities of substituting among different suppliers, transport modes, and international and domestic routes are simultaneously present. The f.o.b. method encourages substitution to a more-distant, lower-price supplier.

This article focuses on the U.S. Tariff Act of 1922. About twenty months were devoted to framing the Tariff Act of 1922. and southern Europe. The reaction produced by the World War I put the act of 1922 in line with the general trend of tariff legislation characteristic of the period following the Civil War. The act is divided into four general parts, called "titles," namely, dutiable list, free list, special provisions and administrative provisions. In this law, each schedule is allotted a possible one hundred paragraphs, and the initial paragraph of each schedule is numbered as the first of its one-hundred group regardless of the last paragraph of the preceding schedule. The rates of the act of 1922 show in general a return to the high protective policy embodied in the laws of 1897 and 1909, modified indeed by the recognition of recent changes in industrial technique and organization. What the average level of duties is in the present act and whether it is higher or lower than that of the acts either of 1897 or of 1909 is impossible to state with mathematical precision. An approximate arithmetical average of all the rates named in a tariff bill can be and in some instance has been made, but this too is of little value. The general character of the new tariff with respect to rates is better gauged by an examination of what was actually done than by an attempt to determine averages and compare either arithmetical or weighted averages for the act of 1922 with corresponding averages for earlier tariffs.

The article examines the effect of tariffs in the 1920s on the level of import in the U.S. A principal weakness of the international economy during the 1920's was the persistent imbalance in international payments. Numerous countries in central and eastern Europe, and among non-European primary producers, had serious merchandise trade deficits, which were not compensated for by current invisible transactions. The influence on United States foreign trade of both tariff changes and internal inflation is basically one of price responsiveness, for tariff variations, like internal price movements, influence imports of foreign commodities by their effect on relative prices. Arguments that suggest that lower United States tariffs, and inflation, would have stimulated imports thus rest on the assumption of a high price elasticity of demand for these products. Yet estimates of the relevant price elasticities for the inter-war period have generally shown United States imports to be price inelastic. Economic historians have for the most part ignored the implications of these estimates, probably because of the extensive methodological criticisms.

The article discusses the benefits of the value-free welfare economics of the Hicks-Kaldor- Scitovszky type in international trade. Economist Paul A. Samuelson has raised an objection to the manner in which Tibor de Scitovszky judges two collections of commodities. He suggests that an acceptable definition of an increase in potential real income necessitates a comparison among all the possible redistributions of income between two positions. Samuelson's definition of a potential increase in real income and the difficulty involved with the double bribe criteria can be better understood with the concept of a utility-possibility function. A distinct advantage of this concept is that welfare analysis can be made without the use of indifference curves. If there are no restrictions on the free trade of goods between the domestic and international sector, that is, completely free trade, and the domestic and international prices are equal, the tariff situation will yield a potential increase in real income. The collection of commodities attained by an appropriate tariff or quota could be reached by free international trade with domestic lump-sum taxes fixing production.

The article focuses on issues related to economic effects of the Australian tariff. There is analysis of the Australian Tariff Committee's report on tariff and free trade theory. Professor Jacob Viner states that free trade theory had not attempted to face certain questions relevant to the application of protection to a country with resources like those of Australia. Economist Alfred Marshall's analysis of the laws of increasing and decreasing returns upon the fiscal policy is of special interest to Australia. It is viewed that the export industries have to bear most of the tariff burden. It is observed that the greatest expansion of employment in the primary industries is in dairying and sugar which have benefited substantially from the tariff. An analysis of the relation of the increase in employment to tariff assistance for manufacturing sustains the conclusion that those industries which have received the greatest protection are those in which the expansion has been most pronounced.

The article discusses the economic growth of New South Wales and Victoria. It focuses on the implementation of tariffs in these regions for the protection of domestic industries. While Victoria had adopted the protective system earlier, New South Wales strictly sticks to a tariff for revenue only. The growth of population has been more rapid in New South Wales than in Victoria. It discusses the tariff systems in both the areas and concludes that a protective tariff will not work in all cases and may be beneficial for only some industries.

This article seeks to extend the analysis on the possibility of tariff to achieve certain non-economic objectives by comparing a tariff with a commonly used protective arrangement which is termed as proportionally distributed quota, as an alternative means of pursuing various objectives of trade restriction. The proportionally distributed quota is a system in which import rights are assigned to producers or consumers in proportion to their individual production or consumption of the restricted good. In addition, the proportionally distributed quota is a practical means of implementing the objective, since it can be put into effect without first estimating the supply and demand relations and does not require revision when changes in these relations occur.

Two effects of tariff protection on economic efficiency in Canada must be distinguished. One is the distorting effect of protection on international specialization which arises from the alteration of the relative prices of goods. The other is the effect of protection on the organization and behavior of particular industries. It is possible to conceive of puts were themselves protected. This article is concerned with the effect of the Canadian tariff on the efficiency of existing Canadian industries, that is, with the extent to which firms minimize their costs within the limits of existing knowledge and at input prices existing in Canada. It appears that the efficiency in production of the Canadian industry was, in turn, the principal determinant of the level of prices charged. For the purpose of this analysis, which is not concerned with international specialization but with the effect of the tariff on the organization of Canadian industries, the appropriate measure of whether a price is high or low is not a comparison with foreign prices but with the level of costs that it would be possible to achieve by efficient production given Canadian input prices.

A recent report of the U.S. Congress Subcommittee on Foreign Economic Policy, entitled "Trade Restraints in the Western Community," makes an assessment of obstructions to trade and especially of tariff levels. This document has been used by the U.S. Congress, has attracted wide attention in the world, and may have a great deal of influence on policy. Yet it is grossly misleading in several respects. The report after assessing the height of tariffs on various groups of commodities, says that the U.S. belongs to a few countries with the lowest tariff levels in the world on agricultural products. It is true that the report does mention that in the case of agricultural goods tariffs are not the most important instrument of protection, because many countries keep fairly low tariffs on such products but grant a very high degree of protection to domestic producers by subsidies and quota restrictions or import licensing. Under this system, where a particular tariff is very high the volume of imports of the article will be very low and therefore the very high tariff rate will be given a very low weight in the total weighting system, which will thus strongly tend to hide the high tariff rate.

The article presents abstracts of articles about international economics. In a given country, two different non-optimal tariffs (a lower one and a higher one) may yield the same level of satisfaction with respect to international trade. From the point of view of world trade, however, the lower non-optimal tariff has a definite advantage over the higher one. It is therefore possible, under certain conditions, to increase world gains without affecting the level of satisfaction of a protective country: it suffices to replace the higher tariff by the lower one. There are two simple formulas available to economists who recommend some pre-determined rate of growth of the domestic money supply as a substitute for discretionary monetary policy: a constant rate of growth of the nominal money supply, and a constant rate of growth of the real money supply which would allow an economy to adjust its money supply for past periods of greater-than-expected growth (be it real, real and monetary or even purely monetary).

This article presents the calculation of the effective protective rate using substitution and supply elasticities. An analysis in the account tariffs on material input as well as the tariff on the output was made clearly by a strategic choice of assumptions in order discover the resource allocation effect. Writers made a list of these assumptions. The purpose of calculating the effective protective rates is that the rates together with the elasticities of supply of value added indicate the direction and relative magnitudes of the production effects instituted by the tariff structure. The conclusion to this study is that the effective protective rates are sensitive to the assumptions made by the writers concerning substitution, non-traded inputs, and production for export.