Download this Paper Open PDF in Browser

WTO Membership and the Shift to Consumption Taxes

42 Pages Posted: 12 Oct 2016  

Date Written: August 17, 2016


Using a panel of 97 mostly developing and transitional countries for the period 1990-2011, this paper explores fiscal implications of membership in the World Trade Organization (WTO). Employing robust difference-in-difference specifications as well as semi-parametric methods, we find that countries joining the WTO experience a decline in revenues from import duties between 0.5% and 1% of GDP. Revenue losses from import duties are more than compensated for by an increase in consumption taxes. Although triggered by WTO accession, the shift towards consumption taxes, in particular to VAT, typically takes place before trade liberalization commitments result in declining tariff revenues.

Keywords: trade liberalization, tax reform, value added tax, GATT, WTO, anticipation effects, synthetic control group method

JEL Classification: H200, F130

Suggested Citation

Buettner, Thiess and Madzharova, Boryana, WTO Membership and the Shift to Consumption Taxes (August 17, 2016). CESifo Working Paper Series No. 6052. Available at SSRN:

Thiess Buettner (Contact Author)

FAU ( email )

Lange Gasse 20
Nürnberg, Bavaria 90403

Boryana Madzharova

FAU ( email )

Lange Gasse 20
Nuernberg, D-90403
+49 911 5302-203 (Phone)

Paper statistics

Abstract Views