Article (Scientific journals)
Coercive Trade Policy
Anesi, Vincent; Facchini, Giovanni
2019In American Economic Journal. Microeconomics, 11, p. 225-256
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Abstract :
[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.
Disciplines :
Economic systems & public economics
Author, co-author :
Anesi, Vincent  ;  University of Luxembourg
Facchini, Giovanni
External co-authors :
yes
Language :
English
Title :
Coercive Trade Policy
Publication date :
2019
Journal title :
American Economic Journal. Microeconomics
ISSN :
1945-7685
Publisher :
American Economic Association, Nashville, United States - Tennessee
Volume :
11
Pages :
225-256
Peer reviewed :
Peer Reviewed verified by ORBi
Available on ORBilu :
since 26 September 2020

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