Targeted Tariff Preferences to Reduce Corruption in Developing States

Abstract

This paper advocates a targeted tariff preferences system to reduce corruption in developing states. Tariff preferences would be concentrated on those states with the worst corruption problem. This paper first argues that corruption results from failure of the institutions mediating public/private sphere interaction. Then, it argues that economic growth is critical to institutional reform in developing states. It argues that targeted tariff preferences not only help spur economic growth, but also provide political incentives within developing states to instigate institutional reform. Lastly, this paper explains the international trade regulations applicable to tariff preferences and argues that these regulations would uniquely authorize the proposed tariff preferences program.

Keywords: corruption, development, GSP, WTO