Publications
Publications
- 2009
- HBS Working Paper Series
Stretching the Inelastic Rubber: Taxation, Welfare and Lobbies in Amazonia, 1870-1910
By: Felipe Tamega Fernandes
Abstract
This paper examines the effect of government intervention via taxation on domestic welfare. A case-study of Brazilian market power on rubber markets during the boom years of 1870-1910 shows that the government generated 1.3% of GDP through an export tax on rubber but that it could have generated 4.7% in total, had the government set the tariff at the optimal level. National, regional and local constraints prevented the government from maximizing regional welfare. In a context of lobbies, government budget maximization may have differed from regional welfare maximization.
Keywords
Government Legislation; Taxation; Business and Government Relations; Welfare or Wellbeing; Rubber Industry; Brazil
Citation
Fernandes, Felipe Tamega. "Stretching the Inelastic Rubber: Taxation, Welfare and Lobbies in Amazonia, 1870-1910." Harvard Business School Working Paper, No. 10-032, October 2009.