Optimal export taxes – the case of cocoa in Cote d'Ivoire

Export taxes can provide additional welfare to large exporters, an argument for interventions in manyprimary commodity exporting countries. We investigate the benefits of export taxation for Côted'Ivoire, the dominant exporter of cocoa. Where many applications treat the formula for optimalexport taxes incorrectly as a prescription, we take the endogeneity of the exporter’s share intoaccount. We also distinguish between short-term and long-term effects, relevant for a tree crop likecocoa and we allow for a normal commercial margin between export and farm gate prices.Results are calculated via simulations in a model, in which the age-compositions of the tree stocks ofmajor producing countries are distinguished. Simulations over a period of 15 years show that higherlevels of export taxation do not change overall revenues of Côte d'Ivoire on a longer term, but lead tostrong redistribution from farmers to the central authorities.