Rules Versus Discretion In Trade Policy: An Empirical Analysis
AbstractWe test empirically for evidence that government tariff-setting behavior depends on the degree of discretion with which policy-makers are endowed. We do this by studying government tariff choices under two distinct environments. One environment is that of tariffs set under the Escape Clause (Section 201 of the U.S. Trade Act of 1974). We argue that these decisions afford the government with ample opportunity to reoptimize, and with correspondingly little ability to commit. The other environment is the Tokyo Round of GATT negotiations and the determination of the set of exclusions from the general formula cuts. We argue that these decisions provided the government with a much diminished opportunity to reoptimize, and with a correspondingly greater ability to commit. Comparing decisions made in these two environments allows us to ask whether the degree of policy discretion has a measurable impact on trade policy decisions. Our findings suggest that it does.
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Bibliographic InfoPaper provided by California Los Angeles - Applied Econometrics in its series Papers with number 19.
Length: 49 pages
Date of creation: 1990
Date of revision:
Contact details of provider:
Postal: UNIVERSITY OF CALIFORNIA AT LOS ANGELES, DEPARTMENT OF ECONOMICS, PROGRAM IN APPLIED ECONOMETRICS, LOS ANGELES CALIFORNIA 90024 U.S.A.
Phone: (310) 825 1011
Fax: (310) 825 9528
Web page: http://www.econ.ucla.edu/
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tariffs ; trade policy;
Other versions of this item:
- Robert W. Staiger & Guido Tabellini, 1991. "Rules versus Discretion in Trade Policy: An Empirical Analysis," NBER Chapters, in: Empirical Studies of Commercial Policy, pages 11-46 National Bureau of Economic Research, Inc.
- Robert W. Staiger & Guido Tabellini, 1990. "Rules versus Discretion in Trade Policy: An Empirical Analysis," NBER Working Papers 3382, National Bureau of Economic Research, Inc.
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