Product regulation or protectionism?

Limor Hatsor () and Artyom Jelnov

The Journal of International Trade & Economic Development, 2023, vol. 32, issue 2, 266-280

Abstract: Product regulation has become a principal means of intervention in international trade. There is a debate, however, on its intent. Gründler and Hillman (2021) propose that half of regulatory restrictions on imports may protect producers, when formally the regulations are intended to protect consumers. The idea that regulation might protect producers rather than consumers goes back to Peltzman (1976) for the regulation of price and appears as a political trade-off in choice of a tariff in Hillman (1982). We provide a theoretical analysis that underpins the puzzle in intent of regulatory restrictions on imports, allowing for ex-ante or ex-post inspection by the regulator (before or after the product is purchased). Our results suggest that under certain circumstances all firms, even importers, prefer ex-ante inspection, which is surprising, given that ex-ante inspection discriminates importers. We also show that ex-ante inspection may be harmful for public safety, because it harms local producers' incentive to make effort, and therefore must be complemented by ex-post inspection.

Date: 2023
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/09638199.2022.2081712 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:jitecd:v:32:y:2023:i:2:p:266-280

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/RJTE20

DOI: 10.1080/09638199.2022.2081712

Access Statistics for this article

The Journal of International Trade & Economic Development is currently edited by Pasquale Sgro, David E.A. Giles and Charles van Marrewijk

More articles in The Journal of International Trade & Economic Development from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().