References of "Facchini, Giovanni"
     in
Bookmark and Share    
Full Text
Peer Reviewed
See detailCoercive Trade Policy
Anesi, Vincent UL; Facchini, Giovanni

in American Economic Journal. Microeconomics (2019), 11

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 ... [more ▼]

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. [less ▲]

Detailed reference viewed: 163 (2 UL)