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This paper studies how discriminations against private enterprises (i.e., non-state-owned enterprises or non-SOEs) in the domestic market affect firms’ investment and production strategies abroad. We first document three puzzling empirical findings using data on Chinese multinational corporations (MNCs). First, private MNCs are less productive than state-owned MNCs. Second, SOEs are less likely to undertake FDI. Third, relative size of state-owned MNCs (compared with non-exporting or non-multinational firms) is larger than that of private MNCs. A theoretical model is built to rationalize these facts. The key economic force is that distortions in the domestic input market incentivize private firms to invest and produce abroad, which results in less tougher self-selection into FDI for those firms (i.e., selection reversal). Compared with state-owned MNCs, private MNCs allocate output disproportionately more in the foreign market, and their size increases disproportionately when they become MNCs. All such theoretical predictions are supported by the data on Chinese MNCs.

The previous version of the paper has circulated under the title: "Does free trade benefit all?" Although global free trade is efficient, each country's benefit from free trade depends on the path that leads to the global free trade agreement. Using a dynamic model of trading bloc formation, we show that when global free trade is reached gradually the countries that are initially excluded gain less than the rest and may be even made worse off by the final free trade agreement than they were in the initial state of no trading blocs.

This paper shows that the WTO's Article XXIV increases the likelihood of free trade, but may worsen world welfare when free trade is not reached and customs unions (CUs) form. We consider a model of many countries. Article XXIV prevents a CU from raising its common external tariff, which makes CU formation less attractive and explains why free trade is more likely. In an equilibrium where two CU's do form, one is necessarily larger than the other. We show that Article XXIV has a composition effect on CU formation, whereby CUs are (endogenously) less asymmetric in size so more goods are subject to tariff distortions as they move between CUs; thus Article XXIV may be 'bad' for world welfare.

What kind of tariff reform is likely to raise welfare in situations where tariff revenue is important? Uncertainty about specification and risk from imprecise parameter estimates of any particular specification reduce the credibility of simulation estimates. A promising alternative is to develop rules which are robust with respect to such uncertainty. We present sufficient conditions for a class of linear rule that guarantee welfare-improving tariff reform. The rules span cones of welfare-improving tariff reforms consisting of convex combinations of (i) trade-weighted-average-tariff-preserving dispersion cuts; and (ii) uniform tariff cuts that preserve domestic relative prices among tariff-ridden goods.

Countries restrict the export of natural resources to lower domestic prices, stimulate downstream industries, earn rents on international markets, or on environmental grounds. This paper provides empirical evidence of evasion of such export barriers. Using tools from the illicit trade literature, I show that exports of minerals, metals, or wood products are more likely to be missing from the exporter's statistics if they face export barriers such as prohibitions or taxes. Furthermore, I show that this relationship is significantly higher in countries with high levels of corruption and bribes at customs. The results have implications for the design of trade policies and environmental protection.

The causes of the USA's exceptional economic performance are investigated by comparing American wages and prices with wages and prices in Great Britain, Egypt, and India. Habakkuk's views on the causes of American industrial pre-eminence are reassessed. While the USA had abundant natural resources, they did not promote manufacturing since international trade equalized prices in Britain and the USA or American tariffs made resources dearer in the USA. Wages were higher in the USA than in Britain since labor markets were tightly integrated and labor was drawn to the USA as the continent was settled. Capital services were also more expensive in USA. American industrialization required tariffs since virtually all input prices were higher than in Britain and industrial productivity was comparable. America's comparative advantage shifted from agriculture to manufacturing after 1895 was industrial productivity soured. This was due to a fall in energy prices in the USA, the American policy of mass schooling which increased the supply of skilled adults and induced firms to invent technology to raise their productivity since the supply of child labor was restricted in comparison to Britain, and the great growth of manufacturing investment induced by the tariff which provide a large market for inventions and generated technical knowledge through learning by doing. Egypt and India could not have industrialized by following American policies since their wages were so low and their energy costs so high that the modern technology that was cost effective in Britain and the USA would not have paid in their circumstances. The development of Egypt and India required more draconian state intervention than a protective tariff, mass education, and infrastructure investment - the American model.

Large multi-product firms dominate international trade flows. This paper documents new facts about multi-product manufacturing exporters that are not easily reconciled with existing multi-product models. Using novel linked production and export data at the firm-product level, we find that the overwhelming majority of manufacturing firms export products that they do not produce. Three quarters of the exported products and thirty percent of export value from Belgian manufacturers are in goods that are not produced by the firm, so-called Carry-Along Trade (CAT). The number of CAT products is strongly increasing in firm productivity while the number of produced products that are exported is weakly increasing in firm productivity. We propose a general model of production and sourcing at multi-product firms. While the baseline model fails to reconcile the relationships between firm productivity and the numbers of exported products observed in the data, several demand and supply-side extensions to the model are more successful. Looking at export price data, we find support for a novel theoretical extension based on demand-scope complementarities.

In this paper, we present a standard quality ladders endogenous growth model with one significant new assumption, that it takes time for firms to learn how to export. We show that this model without Melitz-type assumptions can account for all the evidence that the Melitz (2003) model was designed to explain plus much evidence that the Melitz model can not account for. In particular, consistent with the empirical evidence, we find that trade liberalization leads to a higher exit rate of firms, that exporters charge higher prices for their products as well as higher markups, and that many large firms do not export. We also find that trade liberalization promotes economic growth and that it has the opposite effect of retarding economic growth in a closely comparable growth model with Melitz-type assumptions.

I build and estimate a dynamic structural model of sectoral choices with heterogeneous workers accumulating imperfectly transferable human capital. Utility costs provide an additional barrier to mobility. Estimated by Simulated Minimum Distance on administrative data covering the population of Danish workers, costs are found to be in the range of 10% to 19% of average annual wages. Removing permanent unobserved heterogeneity increases the utility costs by an order of magnitude. I show that both the imperfect transferability of human capital and the utility costs are important in explaining the slow adjustment of the labour market following shocks to the economy. This article is protected by copyright. All rights reserved.

This paper develops a new model of trade policy under dictatorship and democratization. The paper makes two contributions. One is to provide a deeper understanding of the relationship between political institutions and economic performance by studying the endogenous interaction between the form of government and trade policy. If a ruling elite own a factor that is scarce then democratization goes hand in hand with trade liberalization and an increase in economic efficiency, as argued by classical scholars. But if the elite own an abundant factor then democratization is accompanied by an increase in protectionism and a reduction in e¢ ciency. The paper also characterizes the circumstances under which a dictatorship can use trade policy to forestall democratization. The paper?s second contribution is to show how trade policy can be manipulated to maintain the status quo in the face of world price shocks, thus opening the door to a re-examination of trade policy responses to technology shocks. The model is used to explain an interesting episode of trade policymaking between 1815 and 1846, during which time Britain substantially liberalized trade while Prussia, on the other side of the grain market, signi?cantly increased protectionism. It is also used to shed light on the wide-spread imposition of export restrictions in response to the 2007-08 food crisis.

A widely-held view in the lead-up to the abolition of the Multi-fiber Arrangement (MFA) quotas in 2005 was that, in a quota-free global market, large low cost countries (in particular China and India) and countries in proximity to the major markets (such as Mexico, Turkey and countries in the European periphery) would crowd out export performance of the other developing countries. The post-MFA world apparel trade has, however, brought in many surprises: a number of 'predicted losers' have maintained or increased their market shares, while some 'predicted gainers' have performed poorly. This paper aims to broaden our understanding of the determinants of these inter-country differences through a case study of the export-oriented apparel industry in Sri Lanka. The evidence suggests that apparel is a bundle of differentiated products, not a homogenous commodity as commonly assumed by the trade flow modelers, and individual exporting countries have room for carving out a niche in specific products. Sri Lankan apparel industry has managed to maintain growth dynamism through specialization in fashion-basic products, in particular intimate apparel (lingerie) and upmarket casualwear.

China’s policy-makers argued that WTO accession and the accompanying trade liberalization would have a beneficial impact on the domestic economy. China’s import tariffs differed tremendously across industry in the earlier years, but converged to an almost uniform low level after WTO entry. We exploit sectoral variation in the extent of tariff reduction to identify the impact of increased import competition on firm performance and its contribution to the significant productivity growth over the 1995–2007 period. We find evidence of strong downward pressure on prices and mark-ups, but limited evidence that imports took away market share from domestic firms. Furthermore, much of the effects on sectoral productivity come from changes at the extensive margin. Sectors that liberalized most tend to attract especially productive entrants, private firms in particular, which can be rationalized by an increase in the minimum productivity threshold needed to survive in these sectors.

Trade regulation can create jobs in the sectors it protects or promotes, but almost always at the expense of destroying a roughly equivalent number elsewhere in the economy. At a product-specific or micro level and in the short term, controlling trade could reduce the offending imports and save jobs, but for the economy as a whole and in the long term, this position has neither theoretical support nor empirical evidence in its favor. Given that protection may have other—usually adverse—effects, understanding the difficulties in using it to manage employment is important for economic policy.

This paper studies the incentives that developing countries have to protect intellectual properties rights (IPR). On the one hand, free-riding on rich countries technology reduces their investment cost in R&D. On the other hand, firm that violates IPR cannot legally export in a country that enforces them. Moreover free-riders cannot prevent others to copy their own innovation. The analysis predicts that the willingness to enforce IPR is U-shaped in a country GDP: small/poor countries are willing to respect IPR to access advanced economies markets, while large emerging countries are more reluctant to do so because technological transfers from the West boost their production capacity and their domestic markets. Universal enforcement of IPR yields a higher level of innovation and global welfare only if the developing country does not innovate. A partial enforcement of IPR, strict in the north and lax in the south, is socially better if the developing country invests enough in R&D and if its interior market is large. The theoretical predictions of the model are tested with the help of panel data. The empirical analysis supports the theoretical results.

A functioning enforcement mechanism is crucial to ensure the continued success of the GATT/WTO agreements. In this paper, I examine the WTO members’ dispute selection decisions to judge the effectiveness of the WTO’s enforcement institution, the Dispute Settlement Body. Previous research shows that measures of retaliatory capacity (GDP, trade volumes, export structure) correlate with the incidence of WTO disputes, but fails to account for a number of empirical facts, such as the steady drop in trade quarrels since the early 2000s. To explain the observed dispute pattern, I extend the WTO theory by incorporating a link between endogenous trade policy formation and agreement violation and dispute filing decisions. I show that countries are more likely to engage in trade disputes as complainants or defendants when they have a small “tariff overhang”, which represents the difference between bound tariffs (by WTO negotiations) and the actually applied tariffs. Lower tariff overhangs constrain WTO members’ policy flexibility to respond to adverse shocks, which I motivate in my model by sectoral productivity adjustments due to decreases in trade costs after successful trade negotiations. Guided by this theoretical framework, I present empirical evidence that tariff overhangs are an essential determinant of the WTO dispute pattern.

This paper shows that how firms export (directly or indirectly via intermediaries) matters. We develop and estimate a dynamic discrete choice model that allows learning-by-exporting on the cost and demand side as well as sunk/fixed costs to differ by export mode. We find that demand and productivity evolve more favorably under direct exporting, though the fixed/sunk costs of this option are higher. Our results suggest that had China not liberalized its direct trading rights when it joined the WTO, its exports and export participation would have been 26 and 33% lower respectively.

This paper examines the implications of the European Union (EU) regional trade preferences for processed food trade between Greece and its EU partners, and between Greece and non-EU countries. The empirical analysis relies on the gravity model, and uses different estimation techniques. The results show that the EU regional trade preferences led to substantial increases in processed food trade between Greece and its EU partners, emphasizing trade creation effects. The magnitudes of these increases are higher than the intra-EU average, and are more pronounced for Greece's imports than for Greece's exports. The results also indicate that the EU regional trade preferences brought about decreases in processed food trade between Greece and non-EU countries, implying trade diversion effects. The Greek food processing industry could benefit from competitiveness-promoting strategies (e.g., upgrading innovation activities, marketing and distribution channels, and production efficiency) to expand exports to the EU market and to counter import competition in the domestic market. JEL Classification: F13, F14, F15.

I use a quantitative economic geography model to explore subsidy competition among U.S. states. I ask what motivates state governments to subsidize firm relocations and quantify how strong their incentives are. I also characterize fully non-cooperative and cooperative subsidy choices and assess how far away we are from these extremes. I find that states have strong incentives to subsidize firm relocations in order to gain at the expense of other states. I also find that observed subsidies are closer to cooperative than non-cooperative subsidies but the potential losses from an escalation of subsidy competition are large.

This paper develops an efficiency theory of contingent trade policies. We model the competition for a domestic market between one domestic and one foreign firm as a pricing game under incomplete information about production costs. The cost distributions are asymmetric because the foreign firm incurs a trade cost to serve the domestic market. We show that the foreign firm prices more aggressively to overcome its cost disadvantage. This creates the possibility of an inefficient allocation, justifying the use of contingent trade policy on efficiency grounds. Despite an environment of asymmetric information, contingent trade policy that seeks to maximize global welfare can be designed to avoid the potential inefficiency. National governments, on the other hand, make excessive use of contingent trade policy due to rent shifting motives. The expected inefficiency of national policy is larger (smaller) for low (high) trade costs compared to the laissez-faire case. In general, there is no clear ranking between the laissez-faire outcome and a contingent national trade policy.

We studied how the pursuit of bilateral free-trade agreements (FTAs) affects the likelihood of achieving multilateral free trade. We derive and compare the stable Nash equilibria of two games of trade liberalization: in the FTA game, each country can either form an FTA with one of its trading partners or both of them or none of them, whereas in the (restricted) No FTA game, purely bilateral FTAs are not permitted. The major result is that there exist circumstances under which the freedom to pursue (discriminatory) bilateral FTAs is necessary for achieving multilateral free trade.

What can parties to a trade agreement achieve by institutionalizing a rulesbased dispute settlement procedure? What types of renegotiation rules are implementable in an international setting like the WTO? What role can thirdparty arbitration play in dispute settlement? I study these questions within a mechanism design framework. The model generates predictions regarding the pattern of pre-trial and post-trial settlement negotiations, non-compliance with the result of arbitration, and retaliations under an optimal trade agreement. It is shown that an Arbitrated-Liability Regime, under which a defecting party � I am grateful to Helen Milner and Robert Staiger for discussing a previous version of this paper at the Conference on the Economics, Law and Politics of the GATT/WTO, Yale University, 2009. Also, for their useful comments, I am grateful to Kyle Bagwell, Eric Bond, Andrew Daughety, Johannes Horner, David Hummels, Nuno Limao, Giovanni Maggi, Roger Myerson, Jee-Hyeong Park, Jennifer Reinganum, and the seminar participants at Seoul National U., Vanderbilt, Purdue, U. New Hampshire, Midwest International Economics Meeting; Econometric Society’s North American Summer Meeting; and the Workshop on Game Theory in Trade and Development in the Game Theory Festival, Stony Brook U. y The …rst draft of this paper was circulated under the title “Third-Party-Assisted Renegotiation

In a seminal article, Rose (2004) found that the assumed positive impact of the WTO on international trade was questionable. This finding has been scrutinised and modified in subsequent research, using different data sets, econometric methods and separating the WTO from other forms of trade agreements. A key characteristic of the subsequent literature is the rather simplistic way in which trade agreements are treated whereby all trade agreements are lumped together. Trade agreements come, however, in many different forms and shapes. This study addresses these differences in trade agreements. Using a unique database of 296 trade agreements, we distinguish 17 trade-related policy domains and indicate whether the agreements contain legally enforceable commitments. This extensive and novel taxonomy of trade agreements enables us to allow for the possible heterogeneity of the impact of trade agreements on international trade. Using a gravity model, we find that trade agreement heterogeneity indeed matters for international trade and that countries experience significant trade increases due to comprehensive trade agreements even if not all participants are in the WTO.

Special drawing right (SDR) valuation is done in terms of currency amounts of the four international reserve currencies, namely the US Dollar (USD), the Euro, the Japanese Yen and the pound sterling. Currencies included in the SDR calculations are determined on the basis of the value of export of goods and services over the past 5 years. The International Monetary Fund (IMF) Rule O-2(a) defi nes the value of the USD in terms of the SDR as the reciprocal of the sum of the equivalents in USDs of the amounts of the currencies in the SDR basket. Each USD equivalent is calculated on the basis of the middle rate between the buying and selling exchange rates at noon in the London market, or New York market or on the basis of euro reference rates published by the European Central Bank depending upon availability. For other currencies, SDR rates are based on SDR-USD rate and USD-other currency rate. Currency rates in terms of USD as reported by the issuing central banks is different from the SDR-USD rate based on London market, this difference cause the SDR to have different dollar values. It can potentially create spurious translation movements, even for a perfectly hedged position. In this study, we assess the impact of different exchange rate quotations for SDR calculations on SDR as a unit of account. Specifi cally we look at the long-run behavior and the short run dynamics of the difference between SDR as done by the IMF and on basis of London market and look at the implications for SDR as a unit of account and for currency risk management for multilateral development banks that use SDR as a unit of account.

With fast-track authority (FTA), the US Congress delegates trade-policy authority to the President by committing not to amend a trade agreement. We suggest an interpretation in which Congress uses FTA to forestall destructive competition between its members for protectionist rents. We show that FTA is never granted if an industry is operating in the majority of districts. Second, the more equally distributed are the industries across districts and the more similar are the industries' sizes, the more likely it is that FTA is granted. This is true since competition over rents is most punishing when bargaining power is symmetrically distributed, and in that case the ex ante expected welfare of each district is lower without FTA. Third, if existing levels of protection are very different across industries, even if FTA is granted, it may not lead to free trade because a majority of industries may prefer the status quo to free trade.

Purpose – The purpose of this paper is to examine the relationship between trade liberalisation and intra-regional trade in some selected ECOWAS member countries, with particular focus on the role of applied and most favoured nation import tariffs. Design/methodology/approach – Data utilized were sourced from the World Bank's World Development and Governance Indicators, Mayer and Zignago (2006) distance index as well as the World Trade Organisation's World Integrated Trade System (WiTs). The sample period consists of 8 countries covering the years 1998 to 2011. Predicated on a gravity framework, system and difference generalised method of moments dynamic panel data estimators were relied upon. Findings – The empirical results showed that trade liberalisation has contributed to intra-regional trade in the West African sub-region. The potency of trade liberalisation was relatively more pronounced through the use of most favoured nation import tariff compared to applied import tariff rates. Our results also showed that improved institutional quality and infrastructure are associated with higher intra-ECOWAS trade. Furthermore, using alternative measures of institutional quality and infrastructure as well as fixed and random effect estimators validated our findings. Research limitations/implications – Data limitations led to the inclusion of only 8 out of the 15 ECOWAS member countries in the sample. The research was also limited to tariff barriers as measure of trade liberalisation. The same methodology can be applied as data becomes available while a consideration of non-tariff barriers could provide more insights on the dynamics of intra-ECOWAS trade. Originality/value – The findings reinforce the notion that removal of trade restrictions particularly in the manufacturing sector, good governance and infrastructural developments enhance trade amongst ECOWAS countries.

Revolutions in genetic technology have heralded the age of population-scale genomic metadata. This article analyzes the tensions and gaps between traditional conceptions of personhood and international legal responses to a person’s right over disembodied data obtained from his/her body. The opportunities for breakthroughs in healthcare by interrogating population-scale genomic databases are accompanied by questions about privacy, property, dignity, and the nature of information regulation in a global economy. This article highlights instances where law and policy makers have grappled with these challenges, and foreshadows some emerging future challenges. It also highlights differences between jurisdictions, and calls for greater global participation in the development of a coherent framework, rather than continued reliance on a small number of stakeholders, to develop that framework.

Recent studies have concluded that R&D grants can induce firms to export and that exporting and innovating can be complementary activities at the firm level. Yet the trade literature has paid little attention to the scope of innovation policy as a stimulus to both trade and innovation. To investigate this question we rely on a general work-horse model of trade and firm heterogeneity with firm investments in R&D activities. The multiplicity of equilibria together with the interplay of innovation and trade policies uncover novel results. In particular, we show that the effects of either policy depend on the degree of protectionism in a country. Therefore, countries can respond differently to the same policy, and similarly to different policies. In such a context, different governments may face different degrees of freedom regarding how to achieve a given target. This finding leads us to discuss the issue of policy coordination.

The shipping industry, although relatively carbon-efficient, is projected to produce rising carbon emissions in the future as a consequence of increasing world trade. A number of candidate regulations designed to mitigate these emissions have been canvassed by the UN’s International Maritime Organisation and by the European Commission. Many of these schemes are focussed on the use of market measures—emission trading schemes or fuel levies. This paper draws on observational and interview data gathered to examine enforcement issues associated with the control of ships’ sulphur emissions in order to consider the possible enforcement problems that might be associated with projected market measures to control ships’ carbon emissions. Enforcement problems are shown to be associated with the globalised character of the industry and its polycentric governance structure.

Central to the Mental Capacity Act 2005 (MCA) is the claim that a conferral of incapacity may not be based on the wisdom of a decision alone. This paper problematizes this position. Values-based medicine is drawn on to explore the process of capacity assessment, highlighting the presence of preconceptions throughout assessment. Two cases before the Court of Protection are examined to bring into focus the complexity of conducting assessment without reference to wisdom. The paper proposes that every stage in the assessment of capacity is undertaken with reference to preconceptions and that an acknowledgement of these, along with transparency about when they are to be employed, would allow for greater clarity about what the MCA demands of practitioners.

We analyze a simple model of merger policy coordination between two trading countries. We find that two countries producing complementary products are likely to face a prisoners' dilemma situation in implementing their merger policy. The policy-makers in the two countries tend to allow a merger proposed by their domestic firms, even though their welfare would be larger when they coordinate on not allowing merger in each country. This implies that two countries can benefit from coordination on merger policy. We extend the analysis to allow for import tariffs, more than two components, and independent goods, respectively. Lastly, it is shown that policy coordination can be achieved by granting each country a veto power to a merger in other countries.

Trends in international human rights law have challenged States globally to rethink involuntary mental health interventions from a non-discrimination perspective. The United Nations Convention on the Rights of Persons with Disabilities (CRPD) in particular prohibits laws that discriminate on the basis of disability. However, a key criterion for compulsory mental health treatment under typical mental health legislation is a psychiatric diagnosis (in conjunction with risk of harm and other criteria). Hence, for people with mental health disabilities, rights to liberty and consent in healthcare are held to a different standard compared to other citizens. A prominent law reform option being explored by some governments and commentators for achieving non-discrimination is to replace the diagnostic criterion for triggering involuntary intervention with an assessment of mental capacity. After all, every citizen is subject to restrictions on autonomy where they are deemed to lack mental capacity, such as where concussion necessitates emergency service. However, the use of mental capacity “testing” is seen by diverse commentators as wanting in key respects. A prominent criticism comes from the United Nations Committee on the Rights of Persons with Disabilities, which considers mental capacity assessments a form of disability-based discrimination. This article queries the call to replace the diagnostic criterion in mental health law with an assessment of mental capacity in the light of jurisprudence on equality and non-discrimination in international human rights law. Instead, we examine the doctrine of necessity as an area of law, which might help identify specific thresholds for overriding autonomy in emergency circumstances that can be codified in a non-discriminatory way. We also consider the need for deliberative law reform processes to identify such measures, and we suggest interim, short-term measures for creating a “supported decision-making regime” in the mental health context. The article focuses in particular on the Australian context of mental health law reform, though the analysis can be generalised to international trends in mental health law.

This paper aims at investigating the role of different trade regimes in determining the bilateral trade of Western Balkan countries and the enlarged European Union between 2001—2010. Special focus is laid on the intra-regional trade of Western Balkan countries and complementarities of this sub-regional trade integration and the EU accession process. Using panel data, we estimated the gravity model of bilateral exports from Western Balkan and Central Eastern European countries to the core EU members in the 2001–2010 period. The results confirm the importance of EU membership for the development of acceding countries’ trade and shed light on asymmetrical trade regimes as important factors of boosting the bilateral trade flows. Additionally, CEFTA 2006 has a significant contribution to intra-regional Western Balkans trade.

This paper builds a tractable partial equilibrium model to help explain the role of trade preferences given to developing countries, as well as the efficacy of various subsidy policies. The model allows for firm level heterogeneity in demand and productivity and lets the mass of firms that enter be endogenous. Trade preferences given by one country have positive spillovers on exports to others in this model. Preferences given by the European Union to Bangladesh in an industry raise profits, resulting in entry, and some of these firms also export to the United States. The parameters of the model are estimated using cross sectional customs data on Bangladeshi exports of apparel to the United States and European Union. Counterfactual experiments regarding the effects of reducing costs, both fixed and marginal, or of trade preferences offered by an importing country are performed. The counterfactuals show that reducing fixed costs at various levels has very different effects and suggest that such reductions are more effective in promoting exports when applied at later stages when firms are more committed to production. A subsidy of 1.5 million dollars to industry entry costs raises exports by only 0.4 dollars for every dollar spent, but when applied to fixed costs of production, it raises exports by $25 per dollar spent.

Trade economists have long studied the effects of globalization on wage differences between workers with different levels of skill or education. 1 This literature has generally sought to link globalization to changes in the economy-wide skill premium. Attanasio, Goldberg, and Pavcnik (2004) and Gonzaga, Menezes Filho, and Terra (2006) are salient examples that investigate whether changes in sector-specific prices or tariffs, changes in skill composition within and across sectors, and movements in the skill premium are consistent with the predictions of workhorse trade models, such as the HeckscherOhlin model. However, there is little evidence directly establishing a causal effect of globalization on the skill premium. 2 More recently, a growing body of research has focused on trade’s differential effects across local markets within a country. 3 In this paper, we combine these two strands of literature by developing a theoretically consistent approach to studying the causal

The Zollverein, the German customs union of 1834, was the institutional centrepiece of Germany's economic unification. A bargaining model is applied to analyze the structure of its negotiation process and accession sequence. The existence of negative coalition externalities, the effect of a coalition of non-participants, led Prusssia to choose sequential over multilateral negotiations. The nature of these externalities within the areas of financial revenues, trade policy and domestic political economy also explains the observed accession sequence. The choice of a customs union as institutional structure allowed Prussia to extract higher concessions from other states due to stronger coalition externalities.

In this paper, we examine trade policy determinants and trade reform in a developing country setting by using a political economy of trade policy model where the government determines tariffs by balancing the political support from the producers against consumers and places a higher political weight on producers' welfare relative to average citizens. We then expand it in several directions to guide our subsequent estimations at the three-digit industry level for Colombia between 1983 and 1998. We account for import substitution motives for protection and the government's move away from these policies leads to unilateral trade liberalization. We innovatively allow the political weights to vary based on key industry variables beyond a common denominator. The sectors with higher employment, labor cost, and preferential trade agreement (PTA) import shares receive a larger political weight compared to otherwise similar sectors. The novelty of our approach is estimating the effect of sectoral characteristics on protection filtered through the political weights. We obtain more realistic estimates for these weights and provide some evidence for a slowing down effect of PTAs for trade liberalization.

We show that endogenous firm selection provides a new welfare margin for heterogeneous firm models of trade (relative to homogeneous firm models). Under some parameter restrictions, the trade elasticity is constant and is a sufficient statistic for welfare, along with the domestic trade share. However, even small deviations from these restrictions imply that trade elasticities are variable and differ across markets and levels of trade costs. In this more general setting, the domestic trade share and endogenous trade elasticity are no longer sufficient statistics for welfare. Additional empirically observable moments of the micro structure also matter for welfare. (JEL F12, F13, F41) Over the last decade, new theories of trade with heterogeneous firms in differentiated product markets have been developed. These theories were designed to account for features of disaggregated trade data: only some firms export, exporters are more productive than non-exporters, and trade liberalization induces intra-industry reallocations of resources between those different types of firms. These reallocations represent a new potential channel for the gains from trade. However, the implications of these models for aggregate welfare (combining together all welfare channels) were left unanswered. In a recent paper, Arkolakis, Costinot, and Rodriguez-Clare ( 2012)—henceforth, ACR—show that there exists a class of heterogeneous and homogeneous firm models in which a country’s domestic trade share and the elasticity of trade with respect to variable trade costs are sufficient statistics for the aggregate welfare gains from trade. Therefore, if the different models within this class are calibrated to the same domestic trade share and the same trade elasticity, they imply the same welfare gains from trade. Based on this result, ACR ( 2012, p. 94) summarizes the contribution of new theories of heterogeneous firms to the aggregate welfare implications of trade as “So far, not much.”

Recently, a political shift has been observed, in that some political conservatives are now advocating, adjusting, or abandoning draconian drug laws, including mandatory minimums, and funding diversion, re-entry, and drug programs. Vocal proponents of this movement include Grover Norquist, Rand Paul, Edwin Meese, and Mark Levin, from the Texas Public Policy Council. Any movement away from the mass incarceration that has characterized the U.S. correctional policy for the last 30 years is welcomed, however, it is important to note carefully the philosophical foundation of the conservative’s interest in shifting correctional policy. This paper explores the potential factors contributing to this philosophical shift.

International audience; This paper explores the impact of input trade liberalization on imported input and exported product prices. Using Chinese transaction data for 2000–2006, we capture causal effects between exogenous input tariff reductions and within firm changes in HS6-traded product prices. For identification, we make use of a natural control group of firms that are exempted from paying tariffs. Both imported input and export prices rise. The effect on export prices is specific to firms sourcing inputs from developed economies and exporting output to high-income countries. Results are consistent with a scenario within which firms exploit the input tariff cuts to access high-quality inputs in order to quality-upgrade their exports.

This article proposes a change in public policy that promises to greatly reduce major crime in the United States, protect society, eliminate prison overcrowding, and save taxpayer dollars. This policy would employ electronic monitoring (EM) technology in a way that discourages individuals who might otherwise be tempted to commit crimes. The approach is arguably more effective, efficient, humane and ethical than any alternative strategy and potentially could revolutionize law enforcement and the American criminal justice system. Keywords: crime; policy; corrections; law; electronic monitoring; cost-benefit; criminal justice 1. Introduction Existing policies to “get tough” on crime have not only failed to control crime but have contributed to an enormous increase in the number of incarcerated individuals [1,2]. This suggests that the underlying premise—stiffer sentences deter criminals—may be incorrect. Furthermore, even in the unlikely event that incarceration rates could be tripled through a tripling of law enforcement and prison budgets, the available data suggest that the probability that an offender would be apprehended and incarcerated would remain low. As of 2004, the probability that an offender would be incarcerated was negligible for residential burglary (0.8 percent), vehicle theft (0.6 percent), robbery (1.7 percent), and assault (1.2 percent); and fairly small for rape (12.4 percent) [3]. This suggests that the deterrent effect of policies to “get tough” on crime would remain weak, and suggests a need to switch paradigms.

Frank Elbe, Botschafter a.D., kommentiert die Entwicklung der Beziehungen zwischen der EU, den USA und Russland und spricht sich für ein besonnenes Vorgehen der Europäer gegenüber Russland aus. Die Bereitschaft zur Kooperation sollte nicht verlorengehen.

We build into a Ricardian model sectoral linkages, trade in intermediate goods, and sectoral heterogeneity in production to quantify the trade and welfare effects from tariff changes. We also propose a new method to estimate sectoral trade elasticities consistent with any trade model that delivers a multiplicative gravity equation. We apply our model and use our estimated elasticities to identify the impact of NAFTA's tariff reductions. We find that Mexico's welfare increases by 1.31%, U.S.'s welfare increases by 0.08%, and Canada's welfare declines by 0.06%. We find that intra-bloc trade increases by 118% for Mexico, 11% for Canada, and 41% for the U.S. We show that welfare effects from tariff reductions are reduced when the structure of production does not take into account intermediate goods or input–output linkages. Our results highlight the importance of sectoral heterogeneity, intermediate goods, and sectoral linkages for the quantification of the welfare gains from tariffs reductions.

Ein Siebtel aller deutschen Exporte wird von der Elektroindustrie getätigt. Mit einem Ausfuhrvolumen von 166 Mrd. Euro im Jahr 2014 gehört sie zu den weltweit vier größten Lieferanten elektrotechnischer und elektronischer Produkte und Systeme und ist damit ein unmittelbarer Profiteur von Erleichterungen im internationalen Handel. Andreas Gontermann und Jochen Schäfer, ZVEI - Zentralverband Elektrotechnik- und Elektronikindustrie e.V., Frankfurt am Main, stellen die Ergebnisse von Berechnungen des ZVEI vor, die zeigen, dass bisherige Freihandels- und Assoziierungsabkommen der Europäischen Union die deutschen Elektroausfuhren in die entsprechenden Partnerländer regelmäßig befördert haben.

“Why workers’ rights are not women’s rights” is an argument whose purpose is to make clear why workers’ rights rest on a masculine embodiment of the labor subject and it is this masculine embodiment which is at the center of employment contracts and employment relations systems. By excavating the gender subjects implicit to and explicit in regulations of labor, the paper reveals the opposition of paired terms, masculinity and femininity privileging production over reproduction and naturalizing gender-based power relations. The paper identifies various laboring activities associated with differential rights and responsibilities. An examination of the treatment of part-time employment and waged caring labor, framed in labor, welfare, immigration, and citizenship policies and practices, locates exclusions from labor standards and exemptions from entitlements due to eligibility requirements and thresholds that assume the masculine embodiment of the worker-citizen. Gendering the analysis illustrates how contemporary labor laws and conventions grant rights on the basis of, and to, a rather abstract conception of the prototypical worker-citizen. Its origins lie in what classical political economy labeled a capitalist logic, as well as the historical practices in which free class agents entered into contracts for continuous, full-time work free of care responsibilities outside of the wage/labor nexus. Thus, it is this particular abstract construction of the proto-typical worker which instantiates the separation of “rights to” from “responsibilities for”, and it is this separation that allows the masculine embodiment of the labor subject. Modes of regulation privileging rights over responsibilities will valorize the masculine worker-citizen whose rights derive from their participation in wage labor and simultaneously devalue the feminine worker who is directly connected to caring labor.

This paper develops a model of small open economy, with a differentiated goods sector and voluntary provisioning of public good. It is shown that trade policy can alter the quantity of public good provided in the equilibrium. Interestingly, tariffs may fail to protect, leading to a Metzler Paradox like situation. This is because the income effect generated due to the imposition of tariff can lead to an increase in the contribution to the public good. An expanding public sector crowds out the import competing sector. This result holds unambiguously in the neighbourhood of free trade.

The European Union continues to be an important source and destination of foreign direct investment (FDI) in the world measured by flows and stocks. Investment is part of the EU’s common commercial policy, because FDI is one of the vehicles through which each country can develop its industries. The EU's investment policy is focused on providing EU investors and investments with market access and with legal certainty and a stable, predictable, fair and properly regulated environment in which to conduct their business. The paper also provides a synthetic approach to investor-state arbitration in the Transatlantic Trade and Investment Partnership (TTIP) and Canada-EU Comprehensive Economic and Trade Agreement (CETA).

This study examined the impact of economic liberalization policy on performance of the Nigerian industrial sector. Annual data were sourced from the Central Bank of Nigeria Statistical Bulletin and Annual Reports and interpolated to quarterly data. The variables of interest were index of aggregate industrial production, manufacturing production, mining and quarrying production, electricity consumption, energy consumption, population growth, trade openness, financial deepening, and liberalization dummy variable. Unit root test results showed that although some of the variables were trend stationary they all became stationary after differencing once, I(1). The Engel – Granger test results showed the existence of a meaningful long-run relationship among the variables. The empirical results showed that the impact of economic liberalization policy on performance of the Nigerian manufacturing, mining and quarrying, and power subsectors and the aggregate industrial sector is mixed and statistically significant. Periods with economic liberalization policy, 1986Q3-2012Q4 performed differently from periods before economic liberalization policy. The study concluded that the policy change that took place in 1986Q3 and continuous government efforts to further open the economy to the rest of the world has significantly shaped the Nigerian industrial landscape but much is still needed to be done for Nigeria to benefit from the ongoing liberalization process. The study recommends that government should invest heavily on human capital development as a precursor to benefiting from the ongoing economic liberalization policy. - Questo studio esamina l’impatto sul settore industriale nigeriano della politica di liberalizzazione economica. Sono stati utilizzati dati annuali, forniti dal Bollettino statistico e dal Rapporto annuale della Banca Centrale nigeriana, poi incrociati con dati trimestrali. Le variabili prese in considerazione sono l’indice della produzione industriale aggregata, la produzione del settore manifatturiero, la produzione del settore minerario ed estrattivo, i consumi elettrici, i consumi energetici, la crescita demografica, l’apertura del commercio, la profondità finanziaria e la liberalizzazione. I test a radice unitaria hanno mostrato che sebbene alcune variabili fossero tendenzialmente stazionarie, tutte lo sono diventate dopo la differenziazione di I(1). I test di Engel e Granger hanno evidenziato l’esistenza di una significativa relazione di lungo periodo tra le variabili. I risultati empirici hanno mostrato che l’impatto della politica di liberalizzazione economica sull’andamento del settore manifatturiero, minerario ed estrattivo, dei sotto-settori energetici e del settore industriale aggregato è variegato ma statisticamente significativo. Nei periodi di liberalizzazione economica, terzo trimestre 1986/quarto trimestre 2012, l’andamento dell’economia è stato diverso da quello realizzatosi prima di queste politiche. Lo studio conclude che i cambiamenti di politica economica che hanno avuto luogo nel terzo trimestre del 1986 e i continui sforzi del governo per aprire ulteriormente l’economia della Nigeria al resto del mondo hanno avuto una certa influenza sulla struttura del settore industriale, anche se occorre ancora fare molto affinché il paese tragga consistenti benefici dal processo di liberalizzazione in corso. L’indicazione emergente da questo studio è che risulta necessario investire ancora fortemente sullo sviluppo del capitale umano affinché si possa beneficiare delle politiche di liberalizzazione del paese.

This paper examines the impact of voluntary standards on trade studying textiles, clothing, and footwear sectors. It hypothesizes that internationally harmonized standards can reduce the fixed cost burden facing exporting firms, thus encouraging greater market entry and a corresponding increase in product variety on the import side. The data bear out this contention, providing the first evidence on the links between international harmonization and extensive margin trade growth. Moreover, the income level of the exporting country—as a proxy for its ability to adapt to foreign standards—has a major impact on the effect of standards. For an average low income country, a 1% reduction in the total number of European Union standards is associated with a 0.6% increase in export variety, while a 1% increase in the proportion of European Union standards that are internationally harmonized leads to a 0.8% increase in export variety. These effects are weaker, and even reversed, for high income countries.

The aim of this paper is to support a methodology proposal for the analysis of the impact on commercial globalization trend in relation to the internationalization of Mexicans firms. Also this paper analyzes the advantage the Mexican firms took in the liberalization agenda of the Mexican government with the multilateralism and regionalism policies. For this purpose, the statistic descriptive modeling methodology is used to relate grow of the internationalization of the Mexican firms. The impact in the foreign investment of the main multinationals in Mexico is forcing them to centering in competitive productive processes and improving their internal organization, innovation and development.

Article 12 of the UN Convention on the Rights of Persons with Disabilities, particularly as interpreted in the Committee on the Rights of Persons with Disabilities General Comment No. 1, presents a significant challenge to all jurisdictions that equate interventions permitted under their mental health and incapacity laws with mental capacity. This is most notable in terms of the General Comment’s requirement that substitute decision-making regimes must be abolished. Notwithstanding this, it also offers the opportunity to revisit conceptions about the exercise of legal capacity and how this might be better supported and extended through supported decision-making. This article will offer some preliminary observations on this using Scottish mental health and incapacity legislation as an illustration although this may also have relevance to other jurisdictions.