IDEAS home Printed from https://ideas.repec.org/a/sae/jocore/v44y2000i6p730-752.html
   My bibliography  Save this article

Provision for Adversity

Author

Listed:
  • Martin C. McGuire

    (Department of Economics, University of California-Irvine)

Abstract

As contemporary globalization of the world economy continues, each nation enjoys the benefits of greater exploitation of scale economies and of specialization and exchange. But equally true, globalization causes greater dependence among regions, nations, and localities, and this necessarily implies greater vulnerability to disruption of supply to and from each other. Alternative actions that countries might take or actually have taken to manage this vulnerability include (1) stockpiling of goods that might be lost due to political, economic, or natural causes; (2) protection of domestic industries that otherwise could not compete in world markets (the classical “national security†argument for protectionism); (3) maintenance of standby production capabilities, itself closely related to stockpiling; and (4) formation of special economic unions or contingency agreements to guarantee stable supply and exchange. This article develops a unified analysis of the first two of these alternative policies. The analysis examines and summarizes how all these factors combine to determine the optimal level and mix of policies.

Suggested Citation

  • Martin C. McGuire, 2000. "Provision for Adversity," Journal of Conflict Resolution, Peace Science Society (International), vol. 44(6), pages 730-752, December.
    • Handle: RePEc:sae:jocore:v:44:y:2000:i:6:p:730-752
    DOI: 10.1177/0022002700044006002
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/0022002700044006002
    Download Restriction: no
    File URL: https://libkey.io/10.1177/0022002700044006002?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Arye L. Hillman & Ngo Van Long, 1983. "Pricing and Depletion of an Exhaustible Resource When There is Anticipation of Trade Disruption," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 98(2), pages 215-233.
    2. Bhagwati, Jagdish N. & Srinivasan, T. N., 1976. "Optimal trade policy and compensation under endogenous uncertainty: The phenomenon of market disruption," Journal of International Economics, Elsevier, vol. 6(4), pages 317-336, November.
    3. Albert L. Nichols & Richard J. Zeckhauser, 1977. "Stockpiling Strategies and Cartel Prices," Bell Journal of Economics, The RAND Corporation, vol. 8(1), pages 66-96, Spring.
    4. Bergstrom, Clas & Loury, Glenn C & Persson, Mats, 1985. "Embargo Threats and the Management of Emergency Reserves," Journal of Political Economy, University of Chicago Press, vol. 93(1), pages 26-42, February.
    5. Williams,Jeffrey C. & Wright,Brian D., 2005. "Storage and Commodity Markets," Cambridge Books, Cambridge University Press, number 9780521023399, January.
    6. Kahn, Charles M. & Green, Jerry, 1983. "Wage-Employment Contracts," Scholarly Articles 3203642, Harvard University Department of Economics.
    7. Ehrlich, Isaac & Becker, Gary S, 1972. "Market Insurance, Self-Insurance, and Self-Protection," Journal of Political Economy, University of Chicago Press, vol. 80(4), pages 623-648, July-Aug..
    8. McGuire, M.C. & Shibata, H., 1992. ""Protection of Domestic Industries vs. Defense Against Trade Disruptions: Some Neglected Dimensions"," Papers 90-92-27, California Irvine - School of Social Sciences.
    9. Hirshleifer, J & Riley, John G, 1979. "The Analytics of Uncertainty and Information-An Expository Survey," Journal of Economic Literature, American Economic Association, vol. 17(4), pages 1375-1421, December.
    10. Mayer, Wolfgang, 1977. "The national defense tariff argument reconsidered," Journal of International Economics, Elsevier, vol. 7(4), pages 363-377, November.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Martin C. McGuire, 2010. "Economic Analysis and International Security," Public Policy Review, Policy Research Institute, Ministry of Finance Japan, vol. 6(2), pages 313-346, March.
    2. Stergios Skaperdas & Constantinos Syropoulos, 2001. "Guns, Butter, and Openness: On the Relationship between Security and Trade," American Economic Review, American Economic Association, vol. 91(2), pages 353-357, May.
    3. Toshihiro Ihori & Martin McGuireb, 2008. "National Adversity: Managing Insurance and Protection," CIRJE F-Series CIRJE-F-554, CIRJE, Faculty of Economics, University of Tokyo.
    4. Toshihiro Ihori & Martin McGuire, 2006. "Patterns of Non-exponential Growth of Macroeconomic Models: Two-parameter Poisson-Dirichlet Models," CIRJE F-Series CIRJE-F-450, CIRJE, Faculty of Economics, University of Tokyo.
    5. Martin McGuire, 2006. "Uncertainty, Risk Aversion, And Optimal Defense Against Interruptions In Supply," Defence and Peace Economics, Taylor & Francis Journals, vol. 17(4), pages 287-309.
    6. Toshihiro Ihori & Martin McGuire, 2006. "Group Provision Against Adversity: Security By Insurance vs. Protection," CARF F-Series CARF-F-086, Center for Advanced Research in Finance, Faculty of Economics, The University of Tokyo.
    7. Huntington, Hillard G., 2003. "Energy disruptions, interfirm price effects and the aggregate economy," Energy Economics, Elsevier, vol. 25(2), pages 119-136, March.
    8. Todd Sandler, 2000. "Economic Analysis of Conflict," Journal of Conflict Resolution, Peace Science Society (International), vol. 44(6), pages 723-729, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Martin C. McGuire, 2010. "Economic Analysis and International Security," Public Policy Review, Policy Research Institute, Ministry of Finance Japan, vol. 6(2), pages 313-346, March.
    2. Chaton, Corinne & Creti, Anna & Villeneuve, Bertrand, 2009. "Storage and security of supply in the medium run," Resource and Energy Economics, Elsevier, vol. 31(1), pages 24-38, January.
    3. Martin McGuire, 2006. "Uncertainty, Risk Aversion, And Optimal Defense Against Interruptions In Supply," Defence and Peace Economics, Taylor & Francis Journals, vol. 17(4), pages 287-309.
    4. van Bergeijk, Peter A. G. & van Marrewijk, Charles, 1995. "Why do sanctions need time to work? Adjustment, learning and anticipation," Economic Modelling, Elsevier, vol. 12(2), pages 75-86, April.
    5. Creti, Anna & Villeneuve, Bertrand, 2008. "Equilibrium Storage in a Markov Economy," MPRA Paper 11944, University Library of Munich, Germany.
    6. repec:elg:eechap:15325_12 is not listed on IDEAS
    7. Gene M. Grossman & Elhanan Helpman & Hugo Lhuillier, 2021. "Supply Chain Resilience: Should Policy Promote Diversification or Reshoring?," Working Papers 2021-8, Princeton University. Economics Department..
    8. Peter A.G. van Bergeijk, 2009. "Economic Diplomacy and the Geography of International Trade," Books, Edward Elgar Publishing, number 13518.
    9. Luis Eeckhoudt & Christian Gollier & Giovanni Immordino, 2001. "How Diagnostic Tests Affect Prevention: a Cost-Benefit Analysis," CSEF Working Papers 53, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
    10. repec:dau:papers:123456789/5384 is not listed on IDEAS
    11. Gérard Gaudet & Pierre Lasserre, 2011. "The Efficient Use Of Multiple Sources Of A Nonrenewable Resource Under Supply Cost Uncertainty," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 52(1), pages 245-258, February.
    12. Bahel, Eric, 2011. "Optimal management of strategic reserves of nonrenewable natural resources," Journal of Environmental Economics and Management, Elsevier, vol. 61(3), pages 267-280, May.
    13. Behrens, Axel, 1990. "Optimal stockpiling policies for resource-dependent economies," Kiel Working Papers 437, Kiel Institute for the World Economy (IfW Kiel).
    14. Bahel, Eric, 2011. "Optimal management of strategic reserves of nonrenewable natural resources," Journal of Environmental Economics and Management, Elsevier, vol. 61(3), pages 267-280, May.
    15. Huntington, Hillard G., 2003. "Energy disruptions, interfirm price effects and the aggregate economy," Energy Economics, Elsevier, vol. 25(2), pages 119-136, March.
    16. repec:dau:papers:123456789/5204 is not listed on IDEAS
    17. Anna Creti & Bertrand Villeneuve, 2013. "Commodity storage with durable shocks : A simple Markovian model," Post-Print hal-01517436, HAL.
    18. Michele Di Maio & Marco Valente, 2013. "Uncertainty, Specialization and Government Intervention," Metroeconomica, Wiley Blackwell, vol. 64(2), pages 215-243, May.
    19. repec:dau:papers:123456789/4808 is not listed on IDEAS
    20. Lukas, Daniel, 2010. "Patient autonomy and education in specific medical knowledge," Dresden Discussion Paper Series in Economics 07/10, Technische Universität Dresden, Faculty of Business and Economics, Department of Economics.
    21. Nkuiya, Bruno, 2015. "Transboundary pollution game with potential shift in damages," Journal of Environmental Economics and Management, Elsevier, vol. 72(C), pages 1-14.
    22. Makoto Okamura & Koichi Futagami, 1998. "A national-security argument for trade protection," Journal of Economics, Springer, vol. 68(1), pages 39-52, February.
    23. Yongzheng Yang, 2000. "Food Embargoes against China: Their Likelihood and Potential Consequences," Asia Pacific Economic Papers 304, Australia-Japan Research Centre, Crawford School of Public Policy, The Australian National University.
    24. repec:dau:papers:123456789/2280 is not listed on IDEAS
    25. F. H. Gruen & A. L. Hillman, 1981. "A Review of Issues Pertinent to Liquid Fuel Policy," The Economic Record, The Economic Society of Australia, vol. 57(2), pages 111-127, June.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:jocore:v:44:y:2000:i:6:p:730-752. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: http://pss.la.psu.edu/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.