"GATT-think" with asymmetric countries

Paolo Epifani, Juliette Vitaloni

Research output: Journal PublicationArticlepeer-review

6 Citations (Scopus)

Abstract

We argue that a trade agreement which conforms to GATT's reciprocity rule benefits the (stronger) less trade-dependent country at the expense of the (weaker) more trade-dependent country. Reciprocity is so unfavorable to the weaker country that it may be worse off under reciprocity than under the Nash-bargaining solution, a "power-based" approach to trade negotiations that reflects power asymmetries among trading partners. Our results question Bagwell and Staiger's (1999, 2000) view of reciprocity as a rule that "serves to mitigate the influence of power asymmetries on negotiated outcomes."

Original languageEnglish
Pages (from-to)427-444
Number of pages18
JournalReview of International Economics
Volume14
Issue number3
DOIs
Publication statusPublished - Aug 2006
Externally publishedYes

ASJC Scopus subject areas

  • Geography, Planning and Development
  • Development

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