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Not Even Strategic Trade Theory Justifies Export Subsidies

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  • de Meza, David

Abstract

A key proposition of the emerging body of strategic trade theory is that a country may gain from an export subsidy. The positive and normative interest of this result hinges on the neglected question of whether there exist alternative policies which yield even greater gains. This paper shows that price controls can achieve benefits which are never less and, on plausible assumptions, are strictly greater than are possible with an export subsidy. Copyright 1989 by Royal Economic Society.

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  • de Meza, David, 1989. "Not Even Strategic Trade Theory Justifies Export Subsidies," Oxford Economic Papers, Oxford University Press, vol. 41(4), pages 720-736, October.
    • Handle: RePEc:oup:oxecpp:v:41:y:1989:i:4:p:720-36
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    Cited by:

    1. Karp, Larry S. & Perloff, Jeffrey M., 1995. "The failure of strategic industrial policies due to manipulation by firms," International Review of Economics & Finance, Elsevier, vol. 4(1), pages 1-16.
    2. Tchoffo, Rodrigue & Ngouhouo, Ibrahim & Nkemgha, Guivis, 2020. "Trade Liberalization and Macroeconomic Performance in Cameroon: An Imperfect Competition Approach," MPRA Paper 98558, University Library of Munich, Germany, revised 09 Feb 2020.
    3. Karp, Larry S & Perloff, Jeffrey M, 1995. "Why Industrial Policies Fail: Limited Commitment," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 36(4), pages 887-905, November.
    4. D. MacLaren, 1991. "Agricultural Trade Policy Analysis And International Trade Theory: A Review Of Recent Developments," Journal of Agricultural Economics, Wiley Blackwell, vol. 42(3), pages 250-297, September.

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