Commercial Policy in a Predatory World

James Anderson

No 12576, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Mutual causation of predation and trade induces novel effects of commercial policy in this paper. The model can explain trade volume responses to market widening initiatives that are otherwise puzzlingly 'too big' or 'too small'. Efficient commercial policy (broadly defined) depends crucially on the strength of enforcement. Externalities arising between traders are normally internalized by subsidizing (taxing) trade when enforcement is weak (strong). Efficient regional policy squeezes weak enforcement markets while subsidizing strong enforcement markets. Tolerance (intolerance) of smuggling is rational when enforcement is weak (strong).

JEL-codes: F13 K42 O17 (search for similar items in EconPapers)
Date: 2006-10
New Economics Papers: this item is included in nep-int and nep-law
Note: ITI DAE
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Working Paper: Commercial Policy in a Predatory World (2008)
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