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Trade liberalization during transition: A political economy perspective

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  • Wunner, Norbert

Abstract

Most transitional economies in Central and Eastern Europe have rather surprisingly resisted protectionist pressures - at least during early stages of reform - and adopted liberal trade policies. In this paper the course of trade policy during transition is explained from a political economy perspective. It is shown that trade liberalization can be a rational strategy of reform politicians maximizing the probability of electoral success. In this context it is also discussed how trade policy affects the restructuring of state firms, i.e. their transformation into private firms. It is shown that less protection of the state sector does not necessarily enhance restructuring.

Suggested Citation

  • Wunner, Norbert, 1996. "Trade liberalization during transition: A political economy perspective," Discussion Papers, Series II 298, University of Konstanz, Collaborative Research Centre (SFB) 178 "Internationalization of the Economy".
    • Handle: RePEc:zbw:kondp2:298
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    References listed on IDEAS

    as
    1. M. Dewatripont & G. Roland, 1992. "Economic Reform and Dynamic Political Constraints," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 59(4), pages 703-730.
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    More about this item

    Keywords

    Trade Policy; Transition; Probabilistic Voting;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • P21 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Planning, Coordination, and Reform

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