In recent years the Israeli government has somewhat relaxed the previously severe restrictions on charter flights to Israel. This study suggests that liberalisation will benefit the balance of payments and the national economy, but that some restriction is desirable.
The author refutes the common belief that developing countries bear the burden of freight rates on both imports and exports. He concludes that a reduction in export rates would actually harm them, as it would lead to an increase in freight charged to importers, who cannot pass it on.
The authors find that the ad valorem incidence of transport costs on Australian exports is two or three times as high as that of most-favoured-nation tariffs. This is probably true of any developing countries. Suggestions are made for reducing transport costs.
