Introduction

Most studies seeking to quantify the impact of the 1932 tariff on the British economy have concentrated on substitution effects. More recently there have also been a number of macroeconomic analyses of the impact of the tariff. Here we review both types of approaches, emphasising the results of quantitative work.

Studies of import substitution

The first attempt to quantify the effect of the 1932 tariff was undertaken by Leak (1937). Despite employing a descriptive approach and using data confined to 1933 and 1934 Leak's detailed documentation indicates a number of areas where the tariff may have had an impact. Leak begins his analysis by calculating the average tariff level. He uses 1930 as a base year prior to the introduction of the tariff to calculate the average rate of duty that would have been levied on the pre-protection volume of imports. This method thus attempts to take into account those imports that were discouraged by the tariff. Calculations are complicated as many products were liable to specific or mixed rates of duty. Allowing for these difficulties Leak estimates that the average rate of duty was 18.5 per cent in 1933, rising to 19.4 per cent in 1934 and declining to 19.3 and 19.1 per cent in the subsequent years.

Following the introduction of the tariff there was a substantial fall in the volume of imports as shown in table 3.1.