Theory of commodity smuggling tariff and new theory

Phenomenon of Smuggling is movement of goods and services form a place to another place illegally. This phenomenon was shaped under these situations such as rising transaction among geographical spaces and industrial growth and modernization of production and great commercial transportation between countries across the world. This process was recognized as incorrect phenomenon in view of national states at framework of internal, regional and international rules.Cause of smuggling result from the citizen needs that they can not acquire them formally and legally. Smuggling makes pressure and increases national costs because it wastes economical, social and cultural forces. With the formation of the phenomenon of smuggling in the country, theoretical issues associated with it was developed. Most theories in this field are theories commodity tariff such as theory of Jagdish Bhagwati and his colleagues. This paper examines theory of Jagdish Bhagwati and his colleagues as the most important theoretical work in the field of smuggling. The results of this study indicate that tariff rates on supply and demand is not a major factor in smuggling and other variables such as the needs of the citizens, the government is failing to meet these needs, the inability of domestic production in competition with the same products outside, conflict of nationally economic system with systems of regional and global level, the major share of the export sector relies on a goods, diversity of a country’s geographical environment, the difference between the share of employment in different regions of a country, the lack of dynamic and steady strategy of export or import are effective factors in smuggling.