The Dynamic Effect of International Trade Institutions on Social Regulation
نویسنده
چکیده
How do international trade institutions shape social regulations? I develop a dynamic model of domestic regulation under international trade institutions. While international trade institutions invalidate harmful protectionist regulations, they could also indirectly increase regulation by inducing citizens to dismantle domestic institutional constraints on it. If the total effect is a reduction in regulation, international trade institutions weaken special interests by reducing the probability of regulatory protection in the long run. This positive reinforcement benefits societies that have previously chosen high levels of regulation. But if the total effect is an expansion of regulation, international trade institutions could increase regulatory protection and thus strengthen special interests. Paradoxically, the potential for negative externalities could also increase. This negative reinforcement hurts societies that have previously chosen low levels of regulation. The vicious circle stems from a previously unrecognized commitment problem in international politics and provides a novel rationale for market instruments in regulation. ∗I thank Christina Schneider for valuable advice.
منابع مشابه
Effects of Trade and Financial Liberalization on Financial Development (Case Study: MENA Countries)
Financial sector is one of the most influential sectors in economic activities. Empirical and theoretical studies conducted in recent years have also confirmed the significant role of financial institutions in economic growth. Additionally, trade and financial liberalization policies have been particular concerned with strategic policies in developed and developing countries. According to dynam...
متن کاملA Test for the Pollution Haven Effect in the Selected EU-Asian Countries
The pursuit of sustainable development requires balancing the objectives of FDI, Trade, economic growth and environmental protection. Achieving a balance between these often-conflicting priorities is difficult enough at the national level, where competing interests are at least grounded in a common environmental, social and economic context. At the international level, where different countries...
متن کاملFinancial Crisis and Steel Trade Integration in Asia and Pacific: A Static and Dynamic Analysis
The objective of this paper is to explore the effect of financial crisis on trade flows of steel industries in the major Asian-Pacific steel producing countries. Using a static and dynamic panel data analysis, we test the hypothesis that the global financial crisis has a negative effect on Asia-Pacific bilateral steel trade flows. We also examine the role of regional trade integration in bilate...
متن کاملHandling Customs Disputes in the Light of Economic Regulations and Market Ethics
Background: Customs in the world of business today is one of the most important pillars that regulates trade relations between individuals and legal entities, private, public and international law. Among the actors in this field, in addition to national and transnational governments and companies, there is a new phenomenon called the market. The market plays an important role in considering val...
متن کاملTrade Liberalization and International Competitiveness in Iran: An Application of Computable General Equilibrium (CGE) Model
Trade liberalization is often the core attention of foreign economic strategies in developing countries. Findings in the literature confirm a significant effect of free trade on developing economies through which the economic sectors benefit from technology transfer and spillovers and increasing production capacities and input productivity leading to international competitiveness. On the other...
متن کامل