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dc.contributor.authorOrnelas, Emanuel
dc.date.accessioned2014-11-25T12:23:06Z
dc.date.available2014-11-25T12:23:06Z
dc.date.issued2002-02-26
dc.identifier.urihttps://hdl.handle.net/10438/12594
dc.description.abstractThis paper studies the political viability of free trade agreements (FTAs). The key element of the analysis is the 'rent dissipation' that these arrangements induce: by eliminating intra-bloc trade barriers, an FTA reduces the incentives of the local firms to lobby for higher external tariffs, thereby causing a reduction of the rents created in the lobbying process. The prospect of rent dissipation moderates the governments’ willingness to participate in FTAs; they will support only arrangements that are 'substantially' welfare improving, and no FTA that reduces welfare. Rent dissipation also implies that the prospects of political turnover may create strategic reasons for the formation of FTAs. Specifically, a government facing a high enough probability of losing power may want to form a trade bloc simply to 'tie the hands' of its successor. An FTA can affect the likelihood of political turnover as well. If the incumbent party has a known bias toward special interests, it may want to commit to less distortionary policies in order to reduce its electoral disadvantage; the rent dissipation effect ensures that an FTA can serve as the vehicle for such a commitment. In nascent/unstable democracies, the incumbent government can use a free trade agreement also to reduce the likelihood of a dictatorial takeover and to 'consolidate' democracy – a finding that is consistent with the timing of numerous accessions to and formations of preferential arrangements.eng
dc.language.isoeng
dc.publisherEscola de Pós-Graduação em Economia da FGVpor
dc.relation.ispartofseriesSeminários de pesquisa econômica da EPGEpor
dc.rightsTodo cuidado foi dispensado para respeitar os direitos autorais deste trabalho. Entretanto, caso esta obra aqui depositada seja protegida por direitos autorais externos a esta instituição, contamos com a compreensão do autor e solicitamos que o mesmo faça contato através do Fale Conosco para que possamos tomar as providências cabíveispor
dc.titleRent dissipation, political viability and the strategic adoption of free trade agreementseng
dc.typeWorking Papereng
dc.subject.areaEconomiapor
dc.contributor.unidadefgvEscolas::EPGEpor
dc.subject.bibliodataTratados comerciaispor
dc.subject.bibliodataPolítica comercialpor
dc.contributor.affiliationFGV


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