689846282 dc bibtex

(When) does tit-for-tat diplomacy in trade policy pay off? / Barbara Dluhosch; Daniel Horgos

Dluhosch, Barbara ; Horgos, Daniel *1978-*

Englisch

Hamburg : HSU Univ. d. Bundeswehr, 2012

Online Ressource (582 KB, Text) : graph. Darst.

Systemvoraussetzungen: Acrobat Reader

Druckausg.: (When) does tit-for-tat diplomacy in trade policy pay off?. - Hamburg, 2012. - 43 S.

URN: urn:nbn:de:gbv:705-opus-29702

Handle: 10419/71099

Arbeitspapier / Working paper / Online-Publikation / Online-publication

Journal of Economic Literature: F130 ; F510 ; D740

In international relations, short-run incentives for non-cooperation often dominate. Yet, (external) institutions for enforcing cooperation are hampered by national sovereignty, supposedly strengthening the role of selfenforcing mechanisms. This paper examines their scope with a focus on contingent protection aka tit-for-tat in trade policy. By highlighting various strategies in a (linear) partial-equilibrium framework, we show that retaliation of noncooperative behavior by limiting market access works as a disciplining device independently of supply and demand parameters. Our theoretical results are backed by empirical evidence that countries more frequently involved in WTO-mediated disputes entailing tit-for-tat strategies pursue on average more liberal trade regimes. -- Int. Political Economy ; Trade Policy Conflicts ; Tit-for-Tat ; WTO Dispute Settlement