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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. 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, September.
    2. Magee,Stephen P. & Brock,William A. & Young,Leslie, 1989. "Black Hole Tariffs and Endogenous Policy Theory," Cambridge Books, Cambridge University Press, number 9780521377003.
    3. 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.
    4. Easterly, William & Kraay, Aart, 1999. "Small states, small problems?," Policy Research Working Paper Series 2139, The World Bank.
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