Optimal international agreement and restriction on domestic efficiency
Journal of International Economics, ISSN: 0022-1996, Vol: 99, Page: 138-155
2016
- 7Citations
- 136Usage
- 11Captures
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Metrics Details
- Citations7
- Citation Indexes7
- CrossRef7
- Usage136
- Downloads113
- Abstract Views23
- Captures11
- Readers11
- 11
Article Description
The WTO's strict treatment of domestic subsidies has not been well received in the existing literature. An essential reason is that the consequent restriction on domestic efficiency is hardly compatible with the existing theory of government intervention under which the primary objective of using domestic subsidies, domestic efficiency, is not sacrificed for another objective. We develop a trade-agreement model in which the magnitude of a legitimate domestic subsidy with which to address a production externality is private information. We find that an optimal agreement substantially restricts domestic efficiency for the international objective of expanding market access.
Bibliographic Details
http://www.sciencedirect.com/science/article/pii/S0022199616000040; http://dx.doi.org/10.1016/j.jinteco.2016.01.003; http://www.scopus.com/inward/record.url?partnerID=HzOxMe3b&scp=84958527766&origin=inward; https://linkinghub.elsevier.com/retrieve/pii/S0022199616000040; https://dul.usage.elsevier.com/doi/; https://api.elsevier.com/content/article/PII:S0022199616000040?httpAccept=text/xml; https://api.elsevier.com/content/article/PII:S0022199616000040?httpAccept=text/plain; https://ink.library.smu.edu.sg/soe_research/1857; https://ink.library.smu.edu.sg/cgi/viewcontent.cgi?article=2856&context=soe_research; https://dx.doi.org/10.1016/j.jinteco.2016.01.003
Elsevier BV
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