ABSTRACT
Until very recently discussion of the effects of the industrial tariff in the 1930s centred on nominal tariff levels. Where serious attempts at measurement took place they often got bogged down in the dubiousness or clear unreliability of the estimates of elasticities. Sometimes discussion faltered at a point further back, in the unavailability of suitable price and quantity data at a sufficient level of disaggregation to allow useful elasticity estimates to be made. It is therefore clearly desirable to shift attention to an approach that can provide some better indication of the effects of protection, particularly on resource flows in the economy. The approach adopted here is to measure the effective rate of protection. Of course this approach is not adopted simply as a way out of the impasse. Neither should it be thought a simple matter to measure precisely any effects of the tariff. There is an array of difficulties that includes the weakness of the data, the complexity of the tariff structure and the contemporaneous realignment of major world currencies. One problem has been the separation of the many factors at work, but even though this is difficult, and even insoluble, it may nevertheless be possible to point towards the direction of the resource allocation effects of the tariff, particularly for important sectors, and to attach tentative magnitudes to these, rather than rest content with some of the assertions of the past, of the kind: ‘There can be no doubt that the Act of 1932 helped immediately. It provided revenue, reduced the pressure of imports, improved the balance of payments.’ 1
