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Diversity and the disinterest in trade liberalization: on the prospects of self-enforcing cooperation

  • Barbara Dluhosch

    ()

  • Stefanie Krause
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    International economic order, including the rules of the game for trade, usually suffers from enforcement problems. We examine the prospects of self-enforcing cooperation as trade relationships evolve. It turns out that factor differentials and specificities are of utmost importance. In fact, prospects of self-enforcing cooperation are the lower the more diverse the countries are on that score. Differences may even result in countries showing an outright disinterest in trade liberalization. Notably, this result also holds in a recurrent, that is, in an evolutionary setting that otherwise induces cooperation in trade liberalization with self-enforcing properties. Copyright Springer-Verlag 2013

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    File URL: http://hdl.handle.net/10.1007/s00191-012-0267-3
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    Article provided by Springer in its journal Journal of Evolutionary Economics.

    Volume (Year): 23 (2013)
    Issue (Month): 2 (April)
    Pages: 455-475

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    Handle: RePEc:spr:joevec:v:23:y:2013:i:2:p:455-475
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    1. Christopher S. P. Magee & Stephen P. Magee, 2008. "The United States is a Small Country in World Trade," Review of International Economics, Wiley Blackwell, vol. 16(5), pages 990-1004, November.
    2. Theo S. Eicher & Christian Henn, 2009. "In Search of WTO Trade Effects; Preferential Trade Agreements Promote Trade Strongly, But Unevenly," IMF Working Papers 09/31, International Monetary Fund.
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    5. Kyle Bagwell & Robert W. Staiger, 2006. "What do trade negotiators negotiate about? Empirical evidence from the World Trade Organization," Discussion Papers 0607-04, Columbia University, Department of Economics.
    6. Goldstein, Judith L. & Rivers, Douglas & Tomz, Michael, 2007. "Institutions in International Relations: Understanding the Effects of the GATT and the WTO on World Trade," International Organization, Cambridge University Press, vol. 61(01), pages 37-67, January.
    7. Geoffrey M. Hodgson, 2004. "Hayekian evolution reconsidered: a response to Caldwell," Cambridge Journal of Economics, Oxford University Press, vol. 28(2), pages 291-300, March.
    8. Stefano Fiori, 2006. "The emergence of institutions in Hayek’s theory: two views or one?," Constitutional Political Economy, Springer, vol. 17(1), pages 49-61, 03.
    9. Carsten Herrmann-Pillath, 2006. "Reciprocity and the hidden constitution of world trade," Constitutional Political Economy, Springer, vol. 17(3), pages 133-163, September.
    10. Geoffrey M. Hodgson, 2002. "Darwinism in economics: from analogy to ontology," Journal of Evolutionary Economics, Springer, vol. 12(3), pages 259-281.
    11. Anne O. Krueger, 1999. "Are Preferential Trading Arrangements Trade-Liberalizing or Protectionist?," Journal of Economic Perspectives, American Economic Association, vol. 13(4), pages 105-124, Fall.
    12. Caldwell, Bruce, 2001. "Hodgson on Hayek: A Critique," Cambridge Journal of Economics, Oxford University Press, vol. 25(4), pages 539-53, July.
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