ABSTRACT
The problem of how to measure the effect of quantitative import restrictions is unlikely to find a neat solution. One hope of economists seems to be to find a theoretical foundation derived from the theory of tariffs which could be used to measure all forms of protectionism combined, like the ‘trade restrictiveness index’ recently proposed by Anderson and Neary.1 Their index would equal the uniform tariff on all imports which would produce the same welfare level as the existing mixture of tariffs, quotas and other non-tariff barriers to trade. Even if the harmful effects on welfare of tariffs in an equilibrium model are accepted as an approximation to the real economic world, to have sufficiently detailed information on quotas to calculate their effects on the same basis is usually impossible. And where both tariffs and quotas exist on the same imported good, as was typically the case in Britain and western Europe in the period of which we write, the situation becomes more complicated, because reducing the extent of protection by quota increases the extent of protection by tariff and measuring the point at which that occurs requires an even more precise knowledge of the trade and quota in question.
