Rent Dissipation, Political Viability, and the Strategic Adoption of Free Trade Agreements
نویسندگان
چکیده
منابع مشابه
Rent Dissipation, Political Viability, and the Strategic Adoption of Free Trade Agreements
This paper studies the political viability of free trade agreements (FTAs). The key element of the analysis is the “rent dissipation” that these arrangements induce: by eliminating intra-bloc trade barriers, an FTA lowers the incentives of the local firms to lobby for higher external tariffs, thereby causing a reduction of the rents created in the lobbying process. The prospect of rent dissipat...
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This paper studies how income inequality affects the probability of signing free trade agreements (FTAs) in a political economy framework. The median voter approach to FTA formation within a Heckscher-Ohlin framework predicts that an increase in inequality lowers the desirability of an FTA if the partner country is relatively labor abundant, ceteris paribus, and raises the desirability of such ...
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By Xuepeng Liu Abstract: In his paper in the American Economic Review, Levy (1997) develops a political economy model of free-trade agreements (FTAs). He emphasizes that the homotheticity restriction of the production function assumed for the differentiated product is crucial for his model. This comment shows that this homotheticity assumption is unnecessary and actually problematic. It is prob...
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We study in this paper the welfare effects of different types of trade agreements and the equilibrium outcome of trade negotiation, when the objective of each government is politically motivated. We explore a three-country and three-good trade model with endogenous tariffs and export subsidies in a political economy framework. In this context, we suggest that the welfare effects of both bilater...
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ژورنال
عنوان ژورنال: SSRN Electronic Journal
سال: 2003
ISSN: 1556-5068
DOI: 10.2139/ssrn.350520