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A Political-Economic Analysis of Free-Trade Agreements.
Resource type
Author/contributor
- Levy, Philip I (Author)
Title
A Political-Economic Analysis of Free-Trade Agreements.
Abstract
This paper demonstrates that bilateral free-trade agreements can undermine political support for further multilateral trade liberalization. If a bilateral trade agreement offers disproportionately large gains to key agents in a country, then their reservation utility is raised above the multilateral free-trade level, and a multilateral agreement would be blocked. Bilateral agreements between countries with similar factor endowments are most likely to have this effect. It also follows that bilateral free-trade agreements can never increase political support for multilateral free trade. Copyright 1997 by American Economic Association.
Publication
American Economic Review
Volume
87
Issue
4
Pages
506-19
Date
1997-09
Citation
Levy, P. I. (1997). A Political-Economic Analysis of Free-Trade Agreements. American Economic Review, 87, 506–519.
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