Reference : Coercive Trade Policy
Scientific journals : Article
Business & economic sciences : Economic systems & public economics
http://hdl.handle.net/10993/44366
Coercive Trade Policy
English
Anesi, Vincent mailto [University of Luxembourg > > >]
Facchini, Giovanni mailto []
2019
American Economic Journal. Microeconomics
American Economic Association
11
225-256
Yes (verified by ORBilu)
International
1945-7669
1945-7685
Nashville
TN
[en] 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.
http://hdl.handle.net/10993/44366
https://www.aeaweb.org/articles?id=10.1257/mic.20170085

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