Mercantilism as Strategic Trade Policy: The Anglo-Dutch Rivalry for the East India Trade

Douglas Irwin

Journal of Political Economy, 1991, vol. 99, issue 6, 1296-314

Abstract: This paper interprets seventeenth-century mercantilism, when international trade was conducted chiefly by state-chartered monopoly trading companies, in light of recent theories of strategic trade policy. The Anglo-Dutch rivalry for the East India trade illustrates a case in which the profit-shifting motive for strategic trade policies exists. Dutch supremacy in the early East India trade was facilitated by a managerial incentive scheme in the monopoly charter that enabled it to achieve a Stackelberg leadership position. Data from the East India trade around 1620 are used in a Cournot duopoly model to examine the possible effects of other policies. Copyright 1991 by University of Chicago Press.

Date: 1991
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Working Paper: Mercantilism as strategic trade policy: the Anglo-Dutch rivalry for the East India trade (1990)
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