1 / 11

Political Analysis of Trade Adjustments: Addressing Ambiguity and Policy Interventions

This paper explores the interplay of political dynamics in trade policy, focusing on how adjustments and ambiguities affect domestic politics. Traditional interpretations based on general equilibrium models overlook the fluidity of political cleavages and shifting preferences driven by changes in expected income. The paper highlights the role of specific sectors, abundant versus scarce factors, and domestic policy interventions that can mitigate ambiguity. It emphasizes the strategic use of trade policy by politicians within a unified model of domestic and foreign policy.

maeko
Télécharger la présentation

Political Analysis of Trade Adjustments: Addressing Ambiguity and Policy Interventions

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Adjustment, Ambiguity, and Policy Interventions A Political Approach to the Domestic Politics of Trade Mark R. Brawley Dept. of Political Science

  2. Politics and Trade • Current interpretations based on general equilibrium models • Interests depicted as: • exclusive • consistent • Political parties presented as passive receptacles of interests • Cleavages shift more often, more rapidly than these predict

  3. Politics and Trade: Ambiguity • Why would preferences shift? • Ambiguity arises from relaxing the general equilibrium condition • Preferences then turn on expected income (i.e. trade shapes both rates of return and employment opportunities) • For select groups, trade moves these in opposite directions

  4. Observing the cleavage... Abundant Factor Intensive Sector Scarce Factor Intensive Sector Abundant Factors Scarce Factors

  5. The Stolper-Samuelson View Abundant Factor Intensive Sector Scarce Factor Intensive Sector Free Trade Free Trade Abundant Factors Protection Protection Scarce Factors

  6. The Sector-Specific Perspective Abundant Factor Intensive Sector Scarce Factor Intensive Sector Free Trade Protection Abundant Factors Free Trade Protection Scarce Factors

  7. Where do we look for swings? Abundant Factor Intensive Sector Scarce Factor Intensive Sector Free Trade ? Abundant Factors ? Protection Scarce Factors

  8. Cleavages in the DMM Model Specific to abundant- factor intensive sectors Specific to scarce- factor intensive sectors Mobile across sectors free trade free trade protection Abundant Factors ambiguous ambiguous protection Scarce Factors

  9. Domestic Policy Interventions • Interventions in adjustment can reduce ambiguity (e.g. unemployment benefits, “matching,” and sector’s “break-up” rates) • Interventions tilt swing groups’ preferences

  10. Cleavages in the DMM Model Specific to abundant- factor intensive sectors Specific to scarce- factor intensive sectors Mobile across sectors free trade free trade protection Abundant Factors ambiguous ambiguous protection Scarce Factors

  11. Advantages of this Approach • Politicians can use trade policy as a tool in their competition • Cleavages are fluid • Domestic and foreign policies are integrated in one model • Better equipped to address questions about politics

More Related