Reciprocated unilateralism in trade reforms with majority voting

Pravin Krishna and Devashish Mitra ()

Chapter 8 in The Political Economy of Trade Policy:Theory, Evidence and Applications, 2016, pp 147-159 from World Scientific Publishing Co. Pte. Ltd.

Abstract: This paper shows how unilateral liberalization in one country can increase the voting support for reciprocal reduction in trade barriers in a partner country. When trade policies are determined simultaneously in the two countries, we show the possibility of multiple political equilibria — one in which the countries are both protectionist and another in which they trade freely with each other. Starting with trade protection in both countries, a unilateral reform in one country is shown to bring about a free trade equilibrium that obtains majority support in both countries.

Keywords: Political Economy; Protection; Trade Policy; Tariffs; Subsidies; Reciprocal Trade Liberalization; Unilateral Trade Liberalization; Unilateralism; Reciprocity; Lobbying; Median Voter Models (search for similar items in EconPapers)
Date: 2016
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Related works:
Journal Article: Reciprocated unilateralism in trade reforms with majority voting (2008)
Working Paper: Reciprocated Unilateralism in Trade Reforms with Majority Voting (2004)
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