The Political Economy of U.S.-Taiwanese Trade and Other International Economic Relations
This PDF is a selection from an out-of-print volume from the National Bureau of Economic Research Volume Title: Trade and Protectionism, NBER-EASE Volume 2 Volume Author/Editor: Takatoshi Ito and Anne O. Krueger, editors Volume Publisher: University of Chicago Press Volume ISBN: 0-226-38668-6 Volume URL: http://www.nber.org/books/ito_93-2 Conference Date: June 19-21, 1991 Publication Date: January 1993 Chapter Title: The Political Economy of U.S.-Taiwanese Trade and Other International Economic Relations Chapter Author: Robert E. Baldwin, Douglas Nelson Chapter URL: http://www.nber.org/chapters/c8079 Chapter pages in book: (p. 307 - 337) 11 The Political Economy of U. S.-Taiwanese Trade and Other International Economic Relations Robert E. Baldwin and Douglas Nelson In most systematic work by economists on the political economy of trade pol- icy, the primary causal mechanism is the competing demands for different trade policies by various domestic pressure groups, who are motivated by eco- nomic self-interest. I The supply side is modeled quite simply. Politicians also pursue their economic self-interest by seeking to be reelected and, conse- quently, supply the trade policies desired by the group or groups who, by providing votes and campaign contributions, give them the best opportunity for being reelected. This framework has led to a substantial body of theoreti- cal and empirical work that has significantly improved our understanding of trade policy. This model does, however, mainly emphasize the “demand’ side since the demands of pressure groups are weighted to determine the equilibrium level of protection. In the typical political economy model of economists, the sup- plying of particular forms of trade policy by politicians, bureaucrats, and, more generally, the state, as part of their efforts to promote such collective goals as national security, is ruled out.
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