Do tax abandonment and political systems encourage the growth of agricultural exports? This paper examines whether and how a shift in trade policy and political regime type impacts exports of agricultural commodities. We argue that the abandonment of export taxes and a democratic regime have a positive impact on exports of agricultural commodities. When the government abolishes taxes imposed on private exporters and when a country becomes more democratic, exporters have more incentive to export more commodities. Using data regarding Thailand’s rice exports from 1979-1989, we find that when the government abolished three rice export taxes, rice exports grew. We also find that democratic regimes are likely to lead to growth in rice exports. The results indicate that trade liberalisation and democratic system are likely to encourage the growth of agricultural exports.
|Keywords:||Tax Abandonment, Political Regime, Export Taxes, Rice, Thailand|
Lecturer, School of Public Administration, National Institute of Development Administration, Bangkok, Thailand