Global Tariff Negotiations as a Stumbling Bloc to Global Free Trade?

By James Lake (Southern Methodist University) and Santanu Roy (Southern Methodist University)

The principle of non-discrimination lies at the heart of the WTO. GATT Article I mandates that, for a given product, a country cannot set different tariffs on different trading partners.… read more ...

The GATT/WTO’s Special and Differential Treatment of Developing Countries

By Ben Zissimos (University of Exeter Business School)

Special and differential treatment (SDT) is effectively a set of exemptions from MFN extended to developing country members of the General Agreement on Tariffs and Trade (GATT)/World Trade Organization (WTO).… read more ...

State Capacity and The Unintended Consequences of Military Intervention

State capacity determines the power of a state to raise revenues, to enforce contracts, to support markets through regulation, and to establish a ‘monopoly of violence’.  In fact, the extent of state capacity is perhaps the fundamental difference between developed and developing countries: developed countries have significantly more of it than developing countries do.… read more ...

Economics of Populism

Social scientists regard globalization and technological progress as major contributors to the ongoing increase in job and income polarization in the United States and Europe. This increased inequality is thought to have reduced standards of living for the median voter in both regions.  Against this backdrop, the 2007-2008 financial crisis seems to have created a political and economic climate of populism on both the right and the left of the political spectrum.… read more ...

The trade-off between tax revenues and trade liberalization

Standard theory predicts that, in the long term, trade liberalization leads to an increase in allocative efficiency and hence an increase of fiscal revenues.  This prediction is based on the idea that overall economic surplus determines the size of the tax base and an improvement in allocative efficiency increases surplus.  Given this attractive feature of trade liberalization, especially from a fiscal standpoint, it is puzzling that developing countries remain relatively protectionist.  A new branch of the literature has begun to shed light on this issue.… read more ...

Break-up of Nations

The Brexit vote on June 23rd 2016 highlights the basic fact that the costs and benefits of economic and political integration are unequally distributed across different social groups within a region.  Because integration has winners and losers, when decisions on sovereignty are taken through majority voting it is possible that a majority against integration emerges even if it is efficient to integrate.… read more ...

Institutions and Emigration from Developing Countries

One of the issues raised by the current refugee and migration crisis in Europe concerns the question of why people take the decision to emigrate.  An emerging literature focuses specifically on institutional factors.  One strand examines the informal institutions of migration networks.  It attempts to evaluate how the strength of a social network in the receiving country, combined with the skill level of the potential migrant, influences her decision on emigration.  An interesting empirical result is that strong social networks tend to matter for low skilled emigration but not for that of the highly skilled.… read more ...