Coercion is used by one government (the "sender") to influence the trade practices of another (the "target"). We build a two- country trade model in which coercion can be exercised unilaterally or channeled through a "weak" international organization without enforcement powers. We show that unilateral coercion may be ineffective because signaling incentives lead the sender to demand a concession so substantial to make it unacceptable to the target. If the sender can instead commit to the international organization's dispute settlement mechanism, then compliance is more likely because the latter places a cap on the sender's incentives to signal its resolve.
Coercive trade policy / V. Anesi, G. Facchini. - In: AMERICAN ECONOMIC JOURNAL: MICROECONOMICS. - ISSN 1945-7669. - 11:3(2018), pp. 225-256.
Titolo: | Coercive trade policy |
Autori: | FACCHINI, GIOVANNI (Corresponding) |
Settore Scientifico Disciplinare: | Settore SECS-P/01 - Economia Politica |
Data di pubblicazione: | 2018 |
Rivista: | |
Tipologia: | Article (author) |
Digital Object Identifier (DOI): | http://dx.doi.org/10.1257/mic.20170085 |
Appare nelle tipologie: | 01 - Articolo su periodico |
File in questo prodotto:
File | Descrizione | Tipologia | Licenza | |
---|---|---|---|---|
mic.pdf | Publisher's version/PDF | Open Access Visualizza/Apri |