Unilateralism in a Multilateral World

Wilfred Ethier ()

No 01-033/2, Tinbergen Institute Discussion Papers from Tinbergen Institute

Abstract: This paper addresses the interplay between unilateralism and multilateralism. I first describe theirrespective stylized facts. I next present a simple, multi-country model with high initial tariffbarriers and with the features that have always been of paramount concern to policymakers, allowgovernments to negotiate multilateral agreements, and analyze the resulting equilibrium. I thenconsider the possibility of unilateralism and find a role for a system with features remarkablysimilar to contemporary unilateralism. The relationships between multilateralism and unilateralismare subtle: Unilateralism has the properties it has because the world is multilateral (the insurancetriangle); to be useful unilateralism requires a multilateral component of some type; this typeresults from a basic compatibility problem between those who negotiate multilaterally and thosewho establish unilateralism.

Keywords: Unilateralism; multilateralism; administered protection; insurance triangle; multilateral component; compatibility problem (search for similar items in EconPapers)
JEL-codes: F13 (search for similar items in EconPapers)
Date: 2001-03-30
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Journal Article: Unilateralism in a Multilateral World (2002)
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Persistent link: https://EconPapers.repec.org/RePEc:tin:wpaper:20010033

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