A Firm's-Eye View of Policy and Fiscal Reforms in Cameroon
After decades of heavy trade restrictions, fiscal distortions, and currency overvaluation, Cameroon implemented important commercial and fiscal policy reforms. Almost simultaneously, a major CFA devaluation cut the international price of Cameroon's currency in half. The authors examine the effects of these reforms on the incentive structure that manufacturing firms face. Did they create a coherent set of new signals? Was the net effect to stimulate the production of tradable goods? Was the dispersion of tax burdens lessened? They address each of these questions using a cost function decomposition applied to detailed firm-level panel data. They observe that Cameroon's reforms appear to have sent clear new signals to manufacturers, as the effective rate of protection fell by between 80 and 120 percentage points. Unlike trade liberalization, neither tax reforms nor the CFA devaluation had a major systemic effect on profit margins. But the CFA devaluation did twist relative prices dramatically in favor of exportable goods, so export-oriented firms exhibited rapid output growth.
Saved in:
Bibliographic Details
| Main Authors: |
Gauthier, Bernard,
Soloaga, Isidro,
Tybout, James |
|---|
| Language: | en_US |
|---|
| Published: |
World Bank, Washington, DC
2000-09
|
|---|
| Subjects: | output,
import prices,
imports,
industrialization,
input prices,
input use,
input-output tables,
intermediate goods,
intermediate inputs,
international prices,
international trade,
metal products,
oil,
overvaluation,
policy makers,
political economy,
preferential tariff,
price comparisons,
producer prices,
producers,
product differentiation,
product markets,
production costs,
productivity,
productivity growth,
profit margin,
profit margins,
protection measures,
protection rates,
rates of protection,
real exchange rate,
returns to scale,
sales,
scale effects,
structural adjustment,
tariff data,
tariff protection,
tariff rate,
tariff rates,
tariff reductions,
tax rates,
tax reform,
tax reforms,
tax revenues,
total costs,
total sales,
tradable goods,
trade effects,
trade liberalization,
trade policies,
trade reforms,
trade restrictions,
transaction costs,
value of output,
wages,
world prices,
zero tariffs,
policy reform,
fiscal reforms,
devaluation,
currency devaluation,
incentives,
export oriented industries,
commercial policy,
pricing, |
|---|
| Online Access: | http://hdl.handle.net/10986/21350
|
|---|
| Tags: |
Add Tag
No Tags, Be the first to tag this record!
|
|---|
