Regionalism or Multilateralism? A Political Economy Choice
IMF Working Papers, March 1, 2008
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- Regionalism or Multilateralism? A Political Economy Choice
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Bibliographic details
- Authors: Giorgia Albertin
- Published: March 1, 2008
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451869279.001
Overview
- Author: Giorgia Albertin
- Date: March 1, 2008
- Format: IMF Working Papers
- Abstract: This paper provides a political economy analysis of the incentives underpinning a country's decision to enter a regional trade agreement when a multilateral free trade agreement is available, and of how entering a regional trade agreement affects the incentives to pursue multilateral trade liberalization.
Analytical framework
- The analysis explicitly incorporates the influence exerted by organized interest groups in the formation of trade agreements.
- The paper derives a formal condition under which a regional trade agreement is preferred to a multilateral one.
Key findings
- A formal condition is derived (within the paper's model) that characterizes when a country prefers a regional trade agreement over a multilateral free trade agreement.
- A country's decision to enter a regional trade agreement unambiguously undermines the incentives towards multilateral trade liberalization.
Policy implications and interpretation
- The role of organized interest groups is central to understanding trade-agreement choices and the interaction between regionalism and multilateralism.
- Policymakers should recognize that pursuing regional agreements may reduce domestic incentives to support broader multilateral liberalization.
Content in this bundle
- Regionalism or Multilateralism? Giorgia Albertin; IMF Working Paper 08/65; March 1, 2008