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Taking Trade Policy Seriously: Export Subsidization as a Case Study in Policy Effectiveness

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Rodrik, Dani

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Abstract

In thinking about policy, academic economists alternate between theoretical models in which governments can design finely-tuned optimal interventions and practical considerations which usually assume the government to be incompetent and hostage to special interests. I argue in this paper that neither of these caricatures is accurate, and that there is much to be learned by undertaking systematic, analytical studies of state capabilities <196> how they are generated and why they differ across countries and issue areas. Case studies of export subsidization in Bolivia, Brazil, India, Kenya, Korea, and Turkey are presented to confront usual presumptions against actual experience. Contrary to conventional wisdom, the successful cases (Korea and Brazil) turn out to be ones in which the government exercised discretion and selectivity, while the most uniform and non-discretionary cases (Kenya and Bolivia) were clear failures. The paradox is explained in terms of state autonomy and policy coherence.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 900.

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Date of creation: Feb 1994
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Handle: RePEc:cpr:ceprdp:900

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Related research
Keywords: Export Subsidies; State Autonomy; Trade Policy;

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Find related papers by JEL classification:
F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General

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  1. Gabriel Porcile & Gilberto Tadeu Lima, 2006. "Real Exchange Rate And Elasticity Of Labor Supply In A Balance-Of-Payments-Constrained Macrodynamics," Anais do XXXIV Encontro Nacional de Economia [Proceedings of the 34th Brazilian Economics Meeting] 11, ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of Graduate Programs in Economics]. [Downloadable!]
  2. Mody, Ashoka, 1999. "Industrial policy after the East Asian crisis - from"outward orientation"to new internal capabilities?," Policy Research Working Paper Series 2112, The World Bank. [Downloadable!]
  3. Hodler, Roland, 2006. "Industrial Policy in an Imperfect World," Proceedings of the German Development Economics Conference, Berlin 2006 13, Verein für Socialpolitik, Research Committee Development Economics. [Downloadable!]
    Other versions:
  4. Hoekman, Bernard & Smarzynska Javorcik, Beata, 2004. "Policies facilitating firm adjustment to globalization," Policy Research Working Paper Series 3441, The World Bank. [Downloadable!]
    Other versions:
  5. Hoekman, Bernard M. & Maskus, Keith E. & Saggi, Kamal, 2004. "Transfer of technology to developing countries : unilateral and multilateral policy options," Policy Research Working Paper Series 3332, The World Bank. [Downloadable!]
    Other versions:
  6. Gunseli Berik, 2006. "Growth with Gender Inequity: Another Look at East Asian Development," Working Paper Series, Department of Economics, University of Utah 2006_03, University of Utah, Department of Economics. [Downloadable!]
  7. Dani Rodrick, 2003. "Growth Strategies," Economics working papers 2003-17, Department of Economics, Johannes Kepler University Linz, Austria. [Downloadable!]
    Other versions:
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