<script type="text/javascript">
<!--
document.write('<div id="oa_widget"></div>');
document.write('<script type="text/javascript" src="https://www.openaire.eu/index.php?option=com_openaire&view=widget&format=raw&projectId=undefined&type=result"></script>');
-->
</script>
Traditional international trade models explain the sources of comparative advantage and show how a country as a whole gains from trade and from terms-of-trade improvement. The traditional models assumed competitive market-determined outcomes with passive or benevolent government. Income-distribution consequences of trade policy were noted. The models did not address the politics of trade policy, the study of which requires two premises consistent with public-choice principles: (1) that political self-interest underlies policy decisions rather than benevolent-government social-welfare objectives, and (2) political decision makers prefer creation of politically assignable rents to non-assignable budgetary revenue or aggregate country-wide gains from free trade or terms-of-trade improvement. These two premises are acknowledged in the first-generation of models of politicized trade policy. A second generation of models includes the first but not the second premise. It is documented that public-choice premises have not always been included in mainstream economic models. The second-generation models devoid of the primacy of rents in trade-policy determination are mainstream for many members of the academic international trade community. The chapter explains how, by not including the political preference for rents over budgetary revenue, the second-generation models are at variance with the actual conduct of trade policy. Public-choice concepts are also used to re-evaluate a wide range of traditional trade-policy conclusions and recommendations. Empirical evidence is reviewed and interpreted.
ddc:330, rent creation, trade negotiations, F13, political support, budgetary revenue
ddc:330, rent creation, trade negotiations, F13, political support, budgetary revenue
citations This is an alternative to the "Influence" indicator, which also reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically). | 1 | |
popularity This indicator reflects the "current" impact/attention (the "hype") of an article in the research community at large, based on the underlying citation network. | Average | |
influence This indicator reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically). | Average | |
impulse This indicator reflects the initial momentum of an article directly after its publication, based on the underlying citation network. | Average |