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Curing the Dutch disease: The role of tariffs

Year: 2025

Type: article

Abstract: This study explores the role of tariffs in addressing the Dutch Disease effect in resource-rich developing economies. By developing a theoretical framework built on existing literature, the study explores the role that the structure of taxes, internationally, can play in mitigating the adverse effects of resource exports on domestic industrial activity. The theoretical analysis finds that tariffs do influence domestic intersectoral labor allocation as well as industrial production in a resource-exporting economy and can counterbalance the effects of resource exports. Empirical data from 40 developing economies (2004–2021) confirms a negative relationship between resource dependence and manufacturing share of labor, and corroborates the theoretical finding that tariffs do reduce this impact.

Source: Journal of Government and Economics

DOI: 10.1016/j.jge.2025.100147

Author: Cece Cherif Delamou

Institution: Nagoya University

Language: English

Topic: Natural Resources and Economic Development

Subfield: General Economics, Econometrics and Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDGs: Decent work and economic growth, Industry, innovation and infrastructure

Open Access status: gold

Estimated APC paid: $1,650