Reciprocated unilateralism in trade policy

Krishna, Pravin; Mitra, Devashish

doi:10.1016/j.jinteco.2003.10.003

Cited by 57 publications

(11 citation statements)

References 16 publications

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“…Indeed, here as in McLaren's paper, the large trading partner could easily revert to more protectionist policies without fear of retaliation once its small trading counterpart reaches the liberal steady state. 45 This mechanism has been pioneered by Krishna and Mitra (2005) and Krishna and Mitra (2008). potential influence of the status quo policy on the political constituencies for and against reform, (ii) the political frictions both within and across generations borne of different abilities to adjust to changing economic conditions, and (iii) the endogeneity of voters' policy preferences and choices with current and expected economic conditions.…”

Section: Resultsmentioning

confidence: 99%

Escaping a protectionist rut: Policy mechanisms for trade reform in a democracy

Blanchard

Willmann

2011

Journal of International Economics

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Section: Resultsmentioning

confidence: 99%

Escaping a protectionist rut: Policy mechanisms for trade reform in a democracy

Blanchard

Willmann

2011

Journal of International Economics

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“…Devereux and Lee (1999) examine the interaction between international financial markets and trade policy, and find that free trade tends toward equilibrium when international financial markets are fully diversified. Krishna and Mitra (2005) discuss the idea that unilateral tariff reduction by a large country can induce a trading counterpart to reduce its tariff in return, with the model of endogenous lobby formation. Blanchard (2007) shows that exportplatform foreign direct investment (FDI) induces unilateral tariff liberalization by the FDI-source country, suggesting that international capital mobility may substitute for multilateral trade liberalization.…”

Section: Discussionmentioning

confidence: 99%

Cross-border political donations and Pareto-efficient tariffs

Endoh

2012

The Journal of International Trade & Economic Development

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Lobbying activities across international borders could promote international trade policy cooperation because of two distinctive characteristics. First, special interest groups use cross-border donations as tools to wield their influence on ruling parties of other countries directly. Second, cross-border donations make ruling parties take into account the impact of their policy on other countries. They promote efficiency of policy formation. Pareto-efficient tariffs are attained under the conditions that all individuals participate in lobbying activities, ruling parties value the sum of cross-border donations and the sum of domestic gross welfare and domestic donations equally, and contribution schedules are observable to anyone.

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“…It turns out that this question is related to, though not resolved by, an emerging debate in the theoretical literature. On one hand, Krishna and Mitra (2005) and Coates and Ludema (2001) construct stylized political economy models that show unilateral liberalization by a large country may induce small, developing country partners to liberalize under certain conditions. On the other hand, Bagwell and Staiger (2002) argue that reciprocal liberalization enables trading partners to internalize politically generated terms-of-trade externalities and reach Pareto superior outcomes.…”

Section: The Political Economy Of Gspmentioning

confidence: 99%