Landlocked Countries: A Way to Integrate with Coastal Economies

Bidisha Lahiri and Feroz K. Masjidi ()
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Feroz K. Masjidi: Oklahoma State University, Postal: Department of Economics, Spears School of Business, Okahoma State University, Stillwater, OK 74078

Journal of Economic Integration, 2012, vol. 27, 505-519

Abstract: We consider some of the important economic constraints faced by landlocked economies in a game theoretic framework that involves its neighbor that has access to the ocean. We identify the strengths that the landlocked economy might have or develop through policy in order to negotiate with its neighbor. The model is an infinitely repeated game between two asymmetric economies, with the threat of reversion to Nash equilibrium if an economy deviates from the cooperative agreement. We find that sustainable cooperative equilibriums that are Pareto superior do exist, drawing attention to the benefits of economic cooperation between neighbors even if they differ on geographical, political, or diplomatic issues. We do several robustness checks that further bring out the constraints and policy implications for the landlocked economies.

Keywords: Landlocked Economies; Coastal Economies; Bilateral Negotiation; Self-Sustaining Cooperation; Transit; Foreign Input (search for similar items in EconPapers)
JEL-codes: F51 F53 F55 F59 (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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Persistent link: https://EconPapers.repec.org/RePEc:ris:integr:0583

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