This paper shows how unilateral liberalization in one country can increase the voting support for reciprocal reduction in trade barriers in a partner country. When trade policies are determined simultaneously in the two countries, we show the possibility of multiple political equilibria - one in which the countries are both protectionist and another in which they trade freely with each other. Starting with trade protection in both countries, a unilateral reform in one country is shown to bring about a free trade equilibrium that obtains majority support in both countries.
|Original language||English (US)|
|Number of pages||13|
|Journal||Journal of Development Economics|
|State||Published - Feb 2008|
ASJC Scopus subject areas
- Economics and Econometrics