Information Asymmetry and the Problem of Transfers in Trade Negotiations and International Agencies

Koichi Hamada and Shyam Sunder

No 28490, Center Discussion Papers from Yale University, Economic Growth Center

Abstract: This paper studies the role of transfers among groups within a country as well as among countries in a two level game of international trade negotiations. We show that in order to realize the intended transfer in the presence of asymmetric information on the states of recipients (and donors), a transfer process uses up additional resources. The difficulty of making transfers renders it less likely that a nation would find it individually rational to participate as a member of an international institution. Costly transfers render the internal and international adjustment difficult, and serve as a barrier to trade liberalization. Costly international transfers harden the resistance against trade liberalization in the (potentially) recipient country and soften it in the (potentially) donor country.

Keywords: International; Relations/Trade (search for similar items in EconPapers)
Pages: 37
Date: 2005
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Citations: View citations in EconPapers (1)

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https://ageconsearch.umn.edu/record/28490/files/dp050910.pdf (application/pdf)

Related works:
Working Paper: Information Asymmetry and the Problem of Transfers in Trade Negotiations and International Agencies (2005)
Working Paper: Information Asymmetry and the Problem of Transfers in Trade Negotiations and International Agencies (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:yaleeg:28490

DOI: 10.22004/ag.econ.28490

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