Summer 2019- POL 241 Chap 6 "World bank, “Trade Blocs”


Elayne Guzman

 Chap 6- World bank, “Trade Blocs”  
Quote:
“Trade policy gets shaped by the political needs of the governments and by the political pressures exerted by well funded lobbies. Adding a regional dimension to trade policy, meets some political needs and changes lobbying opportunities”
Meaning/Chosen:
    Regionalism adds an existing dimension to the flat plane of unilateral versus multilateral trade policy. Countries are located at particular places of the glove, and their trade policies reflect this placement. Regional trade agreements reach their full potential when the political and ideological differences among participant countries are minimal. Trade blocs work best when members state coordinate monetary and physical policies. Any policy that derived from free trade world be manipulated by special interests, leading to decrease national welfare.
    The policy makers is assumed to be partial to political influence from an organized interest group representing a particular industry, but it also assume to care about the efficiency consequences of restricting trade. Also, policymakers are politically motivated and grant protection in response to demands by certain groups in society (e.g. lobbies). Endogenous lobbying cost influence trade policies, lobbying costs play a role in determining the structure of protection. Special interest groups can choose to send a signal to the policy maker regarding observation they possess and the policy maker observed the signal before setting the trade policy.   

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