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 ...

Summary of the 4th InsTED / 9th EESP-FGV Workshop

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We would like to thank the Sao Paulo School of Economics at The Getulio Vargas Foundation (EESP-FGV) for hosting the 4th InsTED Workshop jointly with their 9th Sao Paulo School of Economics Conference.  We are grateful to them, and also to the Swiss Programme for Research on Global Issues for Development, and the “Firms, Markets, and Values” cluster at the University of Exeter Business School, for sponsoring this event.  The workshop took place at EESP-FGV from May 17th-18th 2017.  Special thanks go to our joint-organizers, Emanuel Ornelas and Vladimir Ponczek, as well as Hully Rolemberg for her extremely helpful and patient interactions with everyone.… 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 ...