Reciprocated Unilateralism in Trade Reforms with Majority Voting

Pravin Krishna and Devashish Mitra ()

No 10826, NBER Working Papers from National Bureau of Economic Research, Inc

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 - countries may both be protectionist or trade freely with each other. Starting with trade protection in both countries, a unilateral reform in one country is thus shown to bring about a free trade equilibrium (a self-enforcing state) that is consistent with majority voting in both countries.

JEL-codes: F1 (search for similar items in EconPapers)
Date: 2004-10
New Economics Papers: this item is included in nep-pol
Note: ITI
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Citations: View citations in EconPapers (1)

Published as Krishna, Pravin, and Devashish Mitra. "Reciprocated Unilateralism in Trade Reforms with Majority Voting." Journal of Development Economics 85(1-2): 81-93, February 2008

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Journal Article: Reciprocated unilateralism in trade reforms with majority voting (2008)
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