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Economies of Scale, Ideology and Trade Policy

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  • Daron Djerdjian

Abstract

This paper analyses trade policy within a modified version of the well-known political economy models of Hillman (1989) and Long & Vousden (1991). The modified model incorporates economies of scale in production and cast doubts on viewing trade policy as solely determined by political ideology and re-election motives. Cross-country analyses confirm our predictions and establish that strategic economic as well as political concerns are dominant in trade policy.

Suggested Citation

  • Daron Djerdjian, 2009. "Economies of Scale, Ideology and Trade Policy," International Economic Journal, Taylor & Francis Journals, vol. 23(1), pages 1-21.
    • Handle: RePEc:taf:intecj:v:23:y:2009:i:1:p:1-21
    DOI: 10.1080/10168730802696475
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    References listed on IDEAS

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    1. Magee,Stephen P. & Brock,William A. & Young,Leslie, 1989. "Black Hole Tariffs and Endogenous Policy Theory," Cambridge Books, Cambridge University Press, number 9780521377003, September.
    2. Matthew J. Slaughter, 2000. "What Are the Results of Product-Price Studies and What Can We Learn from Their Differences?," NBER Chapters, in: The Impact of International Trade on Wages, pages 129-169, National Bureau of Economic Research, Inc.
    3. Easterly, William & Kraay, Aart, 1999. "Small states, small problems?," Policy Research Working Paper Series 2139, The World Bank.
    4. Feenstra, Robert C. (ed.), 2000. "The Impact of International Trade on Wages," National Bureau of Economic Research Books, University of Chicago Press, edition 1, number 9780226239637, August.
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