0

EFFECT OF SMUGGLING ON
WELFARE AND OPTIMAL TARIFF
RATE
Obedur Rashid Bin Sakra !aderi
"#kaderi$%&'ai()*+',
Contents
Introduction))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))) -
Types of Smuggling)))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))) .
Literature Review))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))) /
Optimal Tarif to Reduce Social Cost by Smuggling))))))))))))))))))))))))))))))))0
Bangladesh India Illegal Trade ! real "ndings#)))))))))))))))))))))))))))))))))))$$
Conclusion)))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))) $1
Bibliography)))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))) $.
$
Introduction
S'u&&(in& is a &(+ba( #hen+'en+n) M+s +2 he de3e(+#in& *+unries
are 2a*in& he #r+b(e' +2 i((e&a( rade) A2er 4a&dish N) Bha&5ai and
Ben 6ansen ana(7i*a( #a#er +n s'u&&(in& +her sar + 5+rk +n he
e*+n+'i* ana(7sis +2 s'u&&(in&) Their 8ndin&s are di9erin& 2r+' +ne
an+her as be*ause he7 ried + see he *+n*e# +2 s'u&&(in& 2r+'
di9eren an&(e)
I is eas7 + undersandab(e 2+r a #ers+n ha hi&h rade barriers are
he 'ain issue 5hi*h indu*in& raders + rade i((e&a((7) There are a(s+
'an7 +her reas+n 5hi*h are a(s+ &i3in& +##+runi7 + raders +
rade i((e&a((7) In '+s +2 he de3e(+#in& *+unries he in2rasru*ure
su##+rin& 2+r'a( rade is 5eak and *+ss +2 radin& in*rease 5ih
subsania((7 5ih hi&her 3+(u'es: s+'e +2 i 'a7 s#i(( +3er in+
in2+r'a( radin&)
Tari9 and ;u+a is he usua( 5a7 + i'#+se rade barriers) WTO is
r7in& + (ibera(i<e he 5+r(d 5ide rade a**+rdin& + he n+i+n +2 Free
Trade s7se') There are 5+ di3isi+ns 5h+ are 8&hin& 2+r and a&ains
he 2ree rade s7se') A he ear(7 +2 sa&e +2 &(+ba(i<ai+n: '+s +2
he *+unries #+(i*7 'aker 8&h 2+r rade barriers as i 5i(( he(# +
de3e(+# in2an d+'esi* indusr7) Bu ha=s n+ he +n(7 issue> he
'ain issue behind he in2an indusr7 i'#ressi+n: here is an issue +2
&+3ern'en re3enue earnin&s 2r+' ari9 is hi&her in '+s +2 he
de3e(+#in& *+unr7 hen he earnin& 2r+' d+'esi* a?ai+n)
In Ban&(adesh s'u&&(in& is +ne +2 he bi&&es #r+b(e's) Wih India he
a'+un +2 (e&a( rade is (+5er han he a'+un +2 i((e&a( rade)
A**+rdin& + he #a#er +2 San@ib P+hi and Nisha Tane@a AIndia=s
In2+r'a( Trade Wih Ban&(adeshB A Cua(iai3e Assess'enD: he7 2+und
ha a2er i'#+sin& 2ree rade s7se' in his area : he s'u&&(in& 5i((
-
+**ur besides (e&a( rade be*ause +2 he #++r in2rasru*ure +2 bankin&
and +her s7se')
C(ear(7: h+u&h: s'u&&(in& under'ines #+(ii*a( and (e&a( #r+*esses) I
*+rru#s and de'+ra(i<es) Briber7: ini'idai+n: e3en 'urder are #ar
+2 he s+*k and rade +2 he under5+r(d ha harb+rs he s'u&&(er)
S'u&&(in& e3ades nai+na( 8s*a( res+ur*es ha #er2+r*e are +2en
hea3i(7 de#enden +n i'#+r (e3ies)"Gra7 And Wa(er:$0E/,
In his #a#er Se*i+n A dis*uss ab+u he 7#es +2 s'u&&(in&) Se*i+n B
&i3es a (ieraure re3ie5 +2 he #re3i+us e*+n+'i*a( ana(7sis +n
s'u&&(in&) Se*i+n C)&i3es #r+#+sed '+de( +2 +#i'a( ari9 rae)
Se*i+n D 3isua(i<e he *urren *+ndii+n +2 Ban&(adesh and India
i((e&a( rade siuai+n and *+n*(udes he #a#er)
1
Types of Smuggling
The n+i+n +2 Fs'u&&(in&= *+n@ures u# i'a&es +2 s'u&&(ers (airs and
s'a(( b+as sea(hi(7 in he ni&h) The di*i+nar7 de8nes s'u&&(in& as
F*(andesine(7 i'#+rin& duiab(e &++ds 5ih+u #a7in& he *us+'s=)
The 'eh+ds +r 7#es +2 s'u&&(in& 3ar7 he risk ness and he *+s
in*(udin& d+in& i) A**+rdin& + Ri*hard N) C++#er: here are 2+ur 7#es
+2 s'u&&(in& +r 'eh+ds +2 e3asi+n +2 i'#+r duies)
S+'e s'u&&(in& +**urs: be*ause *us+'s +G*ia( 'a7 n+ re*+rd he
i'#+rs) This *an arise eiher be*ause he7 are (anded +uside he
+G*ia( #+rs +2 enr7: +r be*ause he7 are '+3ed *+3er(7 5ih +r
5ih+u he *+'#(i*i7 +2 *us+'s +G*ia(s hr+u&h he +G*ia( #+rs +2
enr7)
Fa(se(7 de*(ared 3a(ue +2 i'#+rs a(s+ is +ne kind +2 s'u&&(in&) When
ari9s are hi&h: here is an in*eni3e + underHin3+i*e i'#+rs s+ as +
redu*e heir duiab(e 3a(ue) S+'ei'es &++ds 'a7 *+'e hr+u&h he
*us+'s #+s bu 2a(se(7 de*(ared 5ih re&ard + heir naure
IAu+'+bi(es as s*ra#J) This 7#e +2 s'u&&(in& *an be *a((ed as
A'is*(assi8*ai+nD) In his re&i+n '+s +2 he i'e &++ds 'a7 *+'e
hr+u&h he *us+'s #+s #r+#er(7 de*(ared: bu he duies a*ua((7
assessed are be(+5 h+se ha are (e&a((7 a##(i*ab(e) This 7#e *an be
*a((ed as AunderHassess'enD)
Whae3er he s'u&&(in& 7#es is: here is risk and s+*ia( *+s in3+(3ed
5ih s'u&&(in&) M+re +r (ess 2+r e3er7 *ae&+r7 he risk ness and s+*ia(
*+s are sa'e) The 'ain di9eren*es are he 'eh+d +2 d+in& i: he
.
i'#+rer and he &++ds) S'a(( 3+(u'e &++ds are s'u&&(ed b7 he 8rs
'eh+ds and (ar&e 3+(u'e &++ds *+'e hr+u&h he (e&a( #+r)
Literature Review
A*ua((7 '+s +2 he (ieraure +n s'u&&(in& is base +n he #a#er +2
4a&dish Bha&5ai and Ben 6ansen AA The+rei*a( Ana(7sis +2
S'u&&(in&D) In ha #a#er he7 assu'e ha s'u&&(in& is eiher
*+'#eii3e +r '+n+#+(isi* and ha he s'u&&(in& +9er *ur3e is
eiher a *+nsan rae +2 rans2+r'ai+n +r an in*reasin& rae +2
rans2+r'ai+n) The7 a(s+ assu'e ha he s'u&&(in& #r+8 under
*+'#eii+n 5+u(d be <er+: s+ he ;uesi+n +2 residen*e and n+nH
residen*e s'u&&(er *an be insi&ni8*an: 5hi*h 5as arisen b7 6) Peer
Gra7 and In&+ Wa(er=s *+''ens +n he #a#er +2 B6) On N+3e'ber:
$0E/ B6 &a3e he reas+n behind his assu'#i+n) In he #a#er AA
The+rei*a( Ana(7sis +2 S'u&&(in&B A Re#(7D: he7 sh+5ed ha he
#r+b(e' is n+ 5heher s'u&&(er is 2+rei&ner +r d+'esi* residen*e:
he #r+b(e' is he ;uesi+n +2 usin& res+ur*es +2 2+rei&n +r d+'esi*
*+unr7)
An+her issues is ha a he i'e +2 'easure'en 5e(2are &ain '+s +2
he '+de( 2+r&e he *+'#ensai+n s7se' + 'ainain Pare+ +#i'a(
(e3e( *an= be d+ne here 5ih+u an7 *+s) In he s'u&&(in& *ase: 5h+
are &+in& + #a7 *+'#ensai+n are: b7 de8nii+n: *ri'ina(s and 5hen
s+'e +2 hese *ri'ina(s d+ n+ +5e a((e&ian*e + he sa'e nai+na(
saes as he #r+s#e*i3e re*i#iens: i is hard + 'ainain a in*+'e
disribui+n #r+*ess 5ih+u a *+s 2+r (a5 and +rder)
In his '+de( B6 did n+ 'eni+n he sae re3enue &enerai+n is +ne
+2 he i'#+ran reas+ns 2+r ari9) The i'#+sii+n +2 a subsiue a?
/
5+u(d a(s+ ha3e a((+*ai3e *+ss ha ha *+u(d 5e(( e?*eed an7 &ain
2r+' s'u&&(in&)
The '+de( +2 B6 is &i3en be(+5 + undersand he 2urher 8ndin&s)
Wih 2ree rade: #r+du*i+n #+ssibi(i7 *ur3e AB: and &i3en inernai+na( #ri*e (ine P2 C2: he
5e(2are I'a?i'u'J is a U2) Wih ari9: he #r+du*i+n: *+nsu'#i+n: and 5e(2are a P C and U:
res#e*i3e(7: #r+3ided ha n+ s'u&&(in& ake #(a*e) Wih s'u&&(in&: a *+nsan #ri*e (ine
Irans2+r'ai+n (ineJ Ps Cs : (ess see# han he an&en + AB a P : (e&a( rade *eases and
5e(2are ends u# a UsKU) 6en*e: s'u&&(in& redu*es 5e(2are)
S+ur*e) Bha&5ai and 6ansen: #)$EL
L
A**+rdin& + he '+de( (e&a( rade is e(i'inaed 5hen s'u&&(in& akes
#(a*e be*ause he *+s +2 (e&a( i'#+rs: under he ari9 IJ + he
*+nsu'er: e?*eeds he *+s +2 i((e&a( i'#+rs e3en 5hen he
s'u&&(in& sur*har&e IsJ is i'#+sed)
The (en&h +2 P

: *ru*ia( in he B6 ana(7sis +2 he 5e(2are e9e*s +2

s'u&&(in&: 5i(( de#end u#+n he de&ree +2 subsiuabi(i7 +2
i'#+rab(e 2+r e?#+rab(e in #r+du*i+n and +2 e?#+rab(e 2+r
i'#+rab(e in *+nsu'#i+n) The s'a((er are hese 5+ subsiuabi(i7:
he (ess e(asi* + he ari9 5i(( be he de'and 2+r i'#+rs and he
s'a((er 5i(( be he e9e* +2 an7 &i3en ari9 +n he #aers +2 #r+du*i+n
and *+nsu'#i+n"Gra7 and Wa(er: $0E/,
In $00$: Marie Thursb7: Ri*hard 4ens+n and 4err7 Thursb7 #ub(ished a
#a#er in The Quarterly Journal of Economics, in 5hi*h @+urna( B6 a(s+
#ub(ished heir #a#er) The 'ain 8ndin& +2 he #a#er is he #ri*e
dis#ari7 Id+'esi* #ri*e +2 i'#+rs (+5er han he ari9 in*(usi3e 5+r(d
#ri*eJ *+nr+( he #r+8) In B6 '+de( an+her sh+r *+'in&s is : he7
did n+ &i3e in*(ude a 8r' 5hi*h *an i'#+rs (e&a((7 s+'e #+ri+n and
s'u&&(e s+'e #+ri+n +2 i=s +a( i'#+rs)
The '+de( ana(7sis sars 5ih 8r' #r+8 'a?i'i<ai+n #r+b(e': and i
&i3es '+re s#a*e (ike a 8r' *an *h++se + s'u&&(e a 2ra*i+n +2 is
+a( i'#+rs) T+ 'easure he #ri*e dis#ari7 he7 assu'e ha he
di9eren*e be5een e;ui(ibriu' #ri*e PIC
(
J +2 N 8r's rade (e&a((7 and
he #ri*e PIC
*
J +2 N
$
8r's rade i((e&a((7) In he be(+5 &ra#h he '+de(s
is sh+5n)
E
Fi&ureB Pri*e Dis#ari7 IS+ur*eB S'u&&(in&: Ca'+uMa&in&: and Marke
sru*ure: $00$J
An+her 8ndin& +2 he '+de( used b7 MR4 is he en2+r*e'en a*i3iies
e9e*s +n 5e(2are) The7 2+und ha an in*rease in he (e3e( +2
en2+r*e'en Ie?*ess s'u&&(in& *+s +2 a *a'+uMa&erJ redu*es 5e(2are
i2 he e;ui(ibriu' 2ra*i+n s'u&&(ed b7 a *a'+uMa&er is ine(asi* 5ih
res#e* + he (e3e( +2 en2+r*e'en Ie?*ess s'u&&(in& *+sJ) An
in*rease in he (e3e( +2 en2+r*e'en *auses ea*h *a'+uMa&er +
redu*e i'#+rs sin*e is e?#e*ed 'ar&ina( re3enue shi2s d+5n and is
'ar&ina( *+s shi2s u#) This raises #ri*e and (eads (e&a( raders +
e?#and i'#+rs: bu he ne e9e* is 2e5er +a( i'#+rs: (ess
s'u&&(in& and hi&her #ri*e) We(2are is redu*ed un(ess he resu(in&
(+ss in *+nsu'er sur#(us is +9se b7 a redu*i+n in +a( e?*ess
s'u&&(in& *+s) "Thursb7: $00$,
M+s +2 he #a#er based +n hese 5+ '+de(s: Brun+ Larue and 6ar3e7
E) Lu#an did a #a#er in -00$: based +n he de'and side ana(7sis) Bu
+ne hin& '+s +2 he #a#er 'ake a 'isake is ha n+5 in he
&(+ba(i<ai+n s7se' : ari9 are i'#+sed n+ +n(7 + #r+e*
de3e(+#in& *+unries in2an indusr7 : bu 2+r &+3ern'en re3enue
&enerai+n) And '+s +2 he (ieraure is aniH#are+: as be*ause he7
2+r&e + 'eni+n he siuai+n +2 (e&a( i'#+rers 5hi*h is 'akin& (+ss
be*ause +2 s'u&&(in&) And a(s+ 6i*ks *+'#ensain& s7se' is n+
5+rkin& here: as 5e are dea(in& 5ih he #e+#(e 5h+ are *ri'ina(s and
2+r his reas+n 5ih en2+r*in& he' + *+'#ensae> 5e *an= in*rease
he Pare+ +#i'a( #+in and en2+r*in& a*i3iies *+s a (+)
S+ in he ne? se*i+n +2 his #a#er is a(( ab+u a +#i'a( ari9 rae
5hi*h 'a7 redu*e s'u&&(in& 5ih e9e*in& 5e(2are +2 he s+*ie7)
N
Optimal Tarif to Reduce Social Cost by Smuggling
I is +b3i+us ha de3e(+#in& *+unries (ike Ban&(adesh *an= redu*e
ari9 + 0 in near 2uure) I is n+ be*ause + #r+e* in2an indusr7 +2
Ban&(adesh bu a(s+ 2+r re3enue &enerai+n b7 ari9 is hi&h here raher
han dire* a?) On he +her hand en2+r*e'en a*i3iies *an= be
redu*ed raher i has + in*rease as be*ause +2 Ban&(adesh is in he
inernai+na( dru& s'u&&(in& r+ue) I2 Ban&(adesh redu*es he
en2+r*e'en a*i3iies i 5i(( be*+'e a hea3en 2+r dru& dea(er)
The sa'e #r+b(e' is 2a*in& 'an7 +her de3e(+#in& nai+ns a(s+) S+ i
is n+5 &(+ba( issue + redu*e s'u&&(in& and + in*rease rade 5ih
usin& a barrier s7se' raher 2reein& i) And 2+r his reas+n an +#i'a(
ari9 rae is ne*essar7 + 8nd +u 2+r a &i3en #r+du*)
I a' shrinkin& '7 '+de( 2+r +n(7 2+r h+se &++ds 5hi*h are n+ har'2u(
(ike dru&s) As in he #re3i+us se*i+n '+s +2 he '+de( 8nds +u he
re(ai+n be5een 5e(2are 5ih s'u&&(in& and s'u&&(in& 5ih ari9
s7se') S+ 5e *an '+de( ari9 in er's +2 s'u&&(in&: 5e(2are and
+her 2a*+rs)
G+3ern'en use ari9 + redu*e de8*i +2 ba(an*e +2 #a7'en and a(s+
2+r re3enue &enerain& #r+*ess) S+ 5e *an in*(ude &+3ern'en
re3enue as inde#enden 3ariab(es) And 2+r his reas+n +#i'a( ari9
*an be a 2un*i+n +2 a(( he 2a*+rs) The 2un*i+n 5i(( (++k (ike:
0
t$%ts& w& g& m#
6ere O is he +#i'a( ari9 rae 5hi*h is a 2un*i+n +2 s'u&&(in& s:
5e(2are +2 he s+*ie7 5: &+3ern'en re3enue & and 'is*e((ane+us
2a*+rs ')
't('s)*&
't('w)*&
't('g+*& and
't('m,*
The re(ai+n in be5een ari9 and s'u&&(in& and 5e(2are 5i(( be
ne&ai3e: and he &+3ern'en re3enue 5i(( be #+sii3e) I 'eans i2
s'u&&(in& in*rease hen &+3ern'en sh+u(d (+5er he ari9 rae +
redu*e s'u&&(in& and a(s+ + in*rease he 5e(2are +r *+nsu'er sur#(us
&+3ern'en sh+u(d use a (+5er ari9 rae)
F+r e'#iri*a( ana(7sis 5e(2are 5i(( be 'easured as he *+nsu'er
sur#(us (+ss: and s'u&&(in& 5i(( be 'easured as he a'+un +2 i((e&a((7
i'#+red ;uani7 +2 he &++ds) in he 'is*e((ane+us 3ariab(es : 5+r(d
#ri*e : 'arke sru*ure *an be in*(uded) M7 8ndin&s 'a7 di9er
a**+rdin& + d+'esi* 'arke sru*ure) F+r si'#(i*i7 I assu'e ha
d+'esi* 'arke is #er2e*(7 *+'#eii3e +r '+n+#+(isi*: +r - 8r'=s
du+#+(7) I 5i(( r7 + 8nd +u +#i'a( ari9 rae +n he basis +2 '7
3ariab(es and 'arke)
$0
Bangladesh India Illegal Trade ! real "ndings#
Ban&(adesh India=s i((e&a( radin& insiui+n has a &rea ad3ana&e
+3er (e&a( insiui+n) The *+s +2 radin& is (+5er in he i((e&a(
insiui+n) There is a n+i+n ha a rai+na( beha3i+r 5+u(d i'#(7 ha a
'+re eG*ien insiui+n Iin er's +2 (+5er *+ssJ sh+u(d be #re2erred
+3er (ess eG*ien +ne IC+ase $0L0J) S+ i 'akes he sae'en 3a(id
ha in2+r'a( rade in India and Ban&(adesh 5i(( be ha##en beside
2+r'a( rade)
In he be(+5 ab(e +2 radin& a*i3iies: 5e *an see a +3era(( radin&
#aern +2 Ban&(adesh 5ih India)
Category of Trader Respondents in
Bangladesh
Respondent s in India
Informal -ormal Informal -ormal
E?#+rer / N /0 /0
I'#+rer /0 .L 0 L
D+'esi* 'arke -1 1L . $E
F+r'a( E H 1 H
In2+r'a( H H H H
T+a( res#+ndens /0 /0 /0 /0

S+ur*eB India=s In2+r'a( rade 5ih Ban&(adeshB A Cua(iai3e Assess'en
$$
In his ab(e i is *(ear ha +n(7 E I$.PJ +2 he in2+r'a( Ban&(adeshi
raders raded hr+u&h b+h *hanne(s) S+ 5e *an assu'e ha nu'ber
+2 8r's is (ess 5hi*h is n+ i'#+rin& s+'e #+ri+n +2 his &++ds usin&
in2+r'a( *hanne()
An+her &rea 8ndin&s in his re&i+n is he risk in3+(3ed 5ih in2+r'a(
radin& is n+ ha 'u*h si&ni8*an) The 3ia( as#e*s here are e?en
+2 risk ' risk sharin& arran&e'ens and 'e*hanis's +2 risk (essenin&
ha are #re3a(en a'+n& radin& #arners radin& in2+r'a((7)
In he sur3e7 d+ne b7 Sna@ib P+hi and Nisha ane@a sh+5s he riskness
in3+(3e in in2+r'a( radin& )The ab(e is &i3en be(+5
Ris. !ttributes In Bangladesh In India
G++ds n+ *+n2+r'in& +
s#e*i8*ai+nB
..Ine3erJ
In*iden*e +2 de2au( in
de(i3er7 +2 &++dsB
L0Irare(7J
In*iden*e +2 de(a7 in
de(i3er7 +2 &++dsB
/-Irare(7J 0-Irare(7J
De2au( in #a7'enB /-Ine3erJ
In*iden*e +2 &++ds (+s
due + sei<ureB
0NIrare(7J
Labe(s in #arenheses re2er + '+da( ran&e in +#i+nsB ne3er: rare(7
and 2re;uen(7
S+ur*eB India=s In2+r'a( rade 5ih Ban&(adeshB A Cua(iai3e Assess'en
In ha sur3e7 : in2+r'a( raders 5ere asked + &i3e heir #er*e#i+n +n
he #r+babi(i7 +2 bein& *au&h b7 en2+r*e'en a&en*ies : /NP +2 he'
in Ban&(adesh 2e( ha he #r+babi(i7 +2 &ein& *au&h b7
en2+r*e'en a&en*ies 5as be5een 0)0/ + 0)$ 2urher : he7 'ake
#a7'ens + en2+r*e'en a&en*ies + 'ii&ae risk) L0P +2
Ban&(adeshi raders #aid bribes be5een 1P + LP +2 heir urn+3er)
The ransa*in& en3ir+n'en +2 2+r'a( rader is n+ a si'#(e #r+*ess)
I'#+rin& (e&a((7 is b7 n+ 'eans si'#(e as i a(s+ in3+(3es se3era(
$-
se#s su*h as i'#+rs (i*enses: (eer +2 *redi auh+ri<ai+n 2+r':
a3ai(abi(i7 +2 8nan*e: *(earan*e 2r+' *us+'s e*)
The radii+na( ar&u'en is ha in2+r'a( rade akes #(a*e due + rade
and d+'esi* #+(i*7 dis+ri+ns) And i2 he dis+ri+n (e3e( *+rre*ed
hen in2+r'a( rade 5+u(d shi2 + he 2+r'a( rade) Bu in he sur3e7 :
he7 re3ea(ed +her *ru*ia( 2a*+rs : inade;uae rans#+r s7se': #+r
*+n&esi+n: e?*essi3e d+*u'enai+n: de(a7s : s(+5 '+3e'en +2
&++ds: ransshi#'en and +her indire* *+ss)
As in2+r'a( rader ha3e de3e(+#ed 'e*hanis' + 'ii&ae risk: s+ '+s
+2 he 2+r'a( raders (ike + use in2+r'a( radin& s7se' + se(e
dis#ues) And un(ess he ransa*in& en3ir+n'en +2 2+r'a( raders
i'#r+3es: in2+r'a( rade 5i(( *+ninue *+e?iss 5ih 2+r'a( rade: e3en
i2 2ree rade is esab(ished in his re&i+n)
Conclusion
S'u&&(in& 'a7 be 5e(2are &ainin& +r 5e(2are (++sin&) One *an ar&ue
2+r s'u&&(in& b7 usin& he n+i+n +2 Sen=s *a#abi(iies he+re') As
ari9 +r ;u+a redu*in& he *a#abi(iies +2 a #ers+n 5heher he is
*+nsu'er +r i'#+rer) Bu he s7se' 5i(( be he sa'e as a n+r'a(
bud&e *+nsrain '+de() S'u&&(in& *an be ana(7<ed as e?erna(iies)
An+her *an ar&ue a&ains i as 5e(2are in*rease b7 s'u&&(er *an be
5e(2are redu*in& usin& he *+n*e#s +2 Pare+ +#i'a(i7) Whae3er he
5a7 + ana(7<e i he #r+b(e' 5i(( be a(5a7s he sa'e: he s+*ia( *+s
+2 s'u&&(in& is in*(uded in he '+de()
M+s +2 he '+de(s d+n= in*(ude he s+*ia( *+s> as a resu( he e9e*
+2 5e(2are 2+r s'u&&(in& is be*+'e a'bi&u+us) I is *ru*ia( + 8nd a
+#i'a( ari9 rae + redu*e s'u&&(in&: be*ause +2 he s+*ia( *+s is
be*+'in& hu&e as s'u&&(in& in*reasin& he *+rru#i+n and *ri'ina(
a*i3iies in a s+*ie7)
$1
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