Squeezing the state: tariff revenue, state capacity and the WTO’s Doha Round

Tax revenue forms a critical element of state capacity, in turn underpinning thestate’s ability to foster inclusive economic growth. This paper calculates theimpact of the WTO’s Doha Round on tariff revenues among low-incomecountries. It finds that some, though not all, are severely affected, losing up to 17percent of total government tax revenue. In addition, the tariff cuts are found tobe regressive, primarily affecting luxury items, such as motor vehicles. Finally, thepaper analyses the effectiveness of the mechanism included in the Doha Roundto overcome lost tariff revenue, namely aid for trade.