Tariff and Non-Tariff Protection Through a Social Accounting Matrix-Case Study of an African Economy

The present paper attempts to integrate the concepts of ERP (effective rate of protection) from a single sector formulation to a multisector formulation of the usual input-output type. It shows that as a matter of policy single-sector nominal tariff rate has to be replaced by a vector of nominal tariff rates. Similarly a consistent vector of ERP should go along with it so that we may consider both the vectors as instruments and use the inverse of the input-output matrix to determine the nominal tariff vector from a desired ERP vector. The paper goes on to split ERP into ERP for the wage sector and ERP for the profit sector, thus introducing the notion of protection of the consumption of the workers and allied classes as a distinct part of the ERP computation. A Social Accounting approach makes it possible to put all these partial problems together in a single unified model.