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Choked by Red Tape? The Political Economy of Wasteful Trade Barriers

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  • Neary, Peter
  • Maggi, Giovanni
  • Mrázová, Monika

Abstract

Red-tape barriers (RTBs) are an important source of trade costs, but have received little scholarly attention to date. Here we examine the economic-political determinants of RTBs and their effects on trade. Because of their wasteful nature, RTBs have very different implications from those of more traditional trade barriers. In particular, RTBs have important impacts on the extensive margin of trade, and respond in non-standard ways to changes in tariffs and natural trade costs. We argue that taking into account the endogenous response of RTBs is crucial for understanding the effects of tariff liberalization and globalization on trade and welfare.

Suggested Citation

  • Neary, Peter & Maggi, Giovanni & Mrázová, Monika, 2018. "Choked by Red Tape? The Political Economy of Wasteful Trade Barriers," CEPR Discussion Papers 12985, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:12985
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    Cited by:

    1. Lionel Fontagné & Gianluca Orefice & Roberta Piermartini, 2020. "Making small firms happy? The heterogeneous effect of trade facilitation measures," Review of International Economics, Wiley Blackwell, vol. 28(3), pages 565-598, August.
    2. Krenz, Astrid & Prettner, Klaus & Strulik, Holger, 2021. "Robots, reshoring, and the lot of low-skilled workers," European Economic Review, Elsevier, vol. 136(C).
    3. Kamei, Keita & Inomata, Kentaro, 2022. "Wasteful Trade Barriers in Oligopoly," MPRA Paper 114541, University Library of Munich, Germany.
    4. Neary, Peter & Carrère, Céline & Mrázová, Monika, 2020. "Gravity without Apologies: The Science of Elasticities, Distance, and Trade," CEPR Discussion Papers 14473, C.E.P.R. Discussion Papers.
    5. Céline Carrère & Monika Mrázová & J Peter Neary, 2020. "Gravity Without Apology: the Science of Elasticities, Distance and Trade," The Economic Journal, Royal Economic Society, vol. 130(628), pages 880-910.
    6. Ornelas, Emanuel & Tovar, Patricia, 2022. "Intra-bloc tariffs and preferential margins in trade agreements," Journal of International Economics, Elsevier, vol. 138(C).
    7. Chien-Jung Ting & Yi-Long Hsiao, 2020. "Exploring Solutions for the Trade Barriers in Taiwan," Advances in Management and Applied Economics, SCIENPRESS Ltd, vol. 10(5), pages 1-2.
    8. Lorz, Oliver, 2020. "Investment in trade facilitating infrastructure: A political-economy analysis," European Journal of Political Economy, Elsevier, vol. 65(C).
    9. Dale-Olsen, Harald, 2023. "The Impact of New Free Trade Agreements on Incumbent Firms and Workers," IZA Discussion Papers 16649, Institute of Labor Economics (IZA).

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    More about this item

    Keywords

    International trade policy; Non-tariff measures; Political economy; Red tape barriers;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • D7 - Microeconomics - - Analysis of Collective Decision-Making
    • F55 - International Economics - - International Relations, National Security, and International Political Economy - - - International Institutional Arrangements

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