production subsidy and countervailing duties in vertically related markets the hog pork case between canada and the united states this paper analyzes u s countervailing import duties aimed at offsetting the effects of a canadian hog production subsidy approximate countervailing duty formulae for two alternative objectives are derived the permissible range of these duties is illustrated and empirical evidence is provided to restore equilibrium at the presubsidy level in the u s hog market a countervailing duty on hog imports suffices this duty should be less than the unit hog production subsidy to restore equilibrium in both the u s hog and pork markets countervailing duties on both hog and pork imports are required such duties should be less than the unit subsidy and the duty on pork should be less than the duty on hogs

the trade effects of antidumping duties evidence from the 2004 eu enlargement abstract this paper exploits the 2004 eu enlargement as a natural experiment to estimate the effects of antidumping ad duties on import prices and quantities the automatic extension of eu ad policy to new member states following their accession is exogenous to new members trade shocks using this source of variation the paper shows that on average ad duties raise producer prices of targeted exporters however import prices from countries with non market economy status nmes notably china remain unchanged while quantities fall more strongly this is in line with expectations as the eu applies special rules to nmes countries the trade dampening effects of ad duties persist over time moreover the duties appear to induce exporters from non targeted countries to increase their prices

strategic trade policy intellectual property rights protection and north south trade abstract in this paper we analyze the issue of optimal tariffs when the northern and southern firms compete in quantities in an imperfectly competitive northern market and there are potentially varying degrees of intellectual property rights ipr violation by the south ipr violation is reflected through the leakage of technological knowledge spillovers from the northern to the southern firm creating unit cost reduction it is shown that optimal tariffs in this framework are always higher than in the simple duopoly model since they serve here not only as profit shifting devices but also as instruments that influence domestic innovative activity generate scale economies and countervail the ipr violation of the south the other notable difference from the standard duopoly model is that positive tariffs may be desirable from the world welfare point of view

why voluntary export restraints are voluntary the paper presents an analysis of the effect upon an oligopolistic equilibrium of introducing a voluntary export restraint ver upon an importing firm a ver set at the free trade level of imports is shown to raise the profits of all firms within the industry the result follows as the imposition of a ver upon a free trade nash price competition forces the domestic firm to become an industry price leader the ver raises industry prices by facilitating collusion and lowers consumer welfare pourquoi les restrictions volontaires d 1 exportation sont volontaires ce memoire presente une analyse des effets de l introduction de restrictions volontaires a l exportation rve sur une entreprise qui importe dans un monde en equilibre oligopolistique on montre que l introduction de rve approximant le niveau des importations en regime de libre echange devrait augmenter les profits de toutes les entreprises dans l industrie cela decoule du fait que l imposition de rve sur un univers de concurrence par les prix a la nash en regime de libre echange force l entreprise domestique a devenir le leader en prix l introduction de rve augmente le niveau des prix de l industrie en facilitant la collusion et de ce fait reduit le niveau de bien etre des consomrnateurs

optimum discriminatory tariffs under oligopolistic competition this paper attempts to present a simple cournot model to determine the optimal discriminatory tariff rates when the international market is a homogeneous heterogeneous product market in the model there are two foreign firms located in two different countries competing for sales in a local market when the firms sell a homogeneous product and the home country can impose differential tariffs on imports from different countries then the tariff on the low cost producer should be hgher in particular with constant marginal costs the tariff difference should equal half the cost difference on the other hand if the firms sell differentiated products with symmetric linear demands and technologies then the weaker the degree of product differentiation the greater is the tariff difference compared with the cost difference

distributional weights in cost benefit analysis should we forget about them many argue that it is socially inefficient to use distributional weights in cost benefit analysis and that doing so implies large inefficiency losses when distributional matters can be dealt with trough income taxation instead our results question this view by showing a large range of cases when distributional weights are second best optimal to use one example is when different provided goods affect tax revenues equally per dollar spent utility functions that are separable in the provided goods is sufficient for this most results hold for linear and non linear income taxes and whether they are optimal or not general policy implications are discussed

policies and international trade agreements on technical compatibility for industries with network externalities abstract the paper considers a country home in which consumers have heterogeneous preferences over ex ante incompatible domestic and imported products and benefit from a network externality we analyze the cases with trade under perfect competition and the international duopoly in which both governments strategically use policies toward compatibility but cannot use conventional trade policies in both cases the equilibrium outcome of the non cooperative game depends upon the strength of the network externality effect and involves either an excessively high equilibrium level of compatibility in combination with either too much or too little trade or very low equilibrium levels of both compatibility and trade the paper concludes with the analysis of the international agreements on policies toward compatibility and evaluates the existing provisions in the wto legal system aimed at minimizing the trade inhibiting impact of standards and regulations in the area of technical compatibility

project appraisal and planning twenty years on this paper discusses the use and usefulness of social cost benefit analysis it briefly recalls the main features of the procedures put forward in the book by the authors and addresses some of the issues that have arisen in theoretical work since the early 1970s particularly the implications of uncertainty an analysis of the value of project appraisal under uncertainty is provided the rise and decline of project appraisal in the world bank and elsewhere is charted and reasons are considered particular attention is given to the difficulty of using shadow prices and to the institutional environment it is argued that evidence from analysis of the world bank s projects is consistent with placing a high value on the process of economic appraisal the costs of appraisal are noted as is the need to avoid excessive complexity the paper argues for the importance of an economic appraisal system and of attending to the incentives that operate in such a system

anti dumping and countervailing duties under oligopoly this paper points out an error in a recent paper by dixit 1988 he claims that when there is no domestic production a fully countervailing duty is optimal it is shown here that only a partially countervailing duty is optimal

simulating changes in conjectural variations tariff and quota nonequivalence in food processing increasingly agricultural economists have argued that domestic and international agricultural and processed food markets are at least to some degree imperfectly competitive while early work in this area simply imposed behavioral and structural forms on the international market under study mccalla and alaouze watson and sturgess recent efforts have been to identify the appropriateness of these assumptions by explicitly testing for imperfectly competitive behavior relevant work includes that of karp and perloff and love and murniningtyas similarly a number of studies have tested for market power in domestic food markets see perloff for a useful summary lagging behind these recent developments has been the incorporation of imperfect competition into the modeling of agricultural trade policy reforms for example much of the work that has dominated assessment of the gatt uruguay round reforms tyers and anderson typically assumes perfectly competitive behavior in the food and agricultural sector despite increasing evidence to the contrary recently however noncompetitive behavior in food processing has been incorporated into computable general equilibrium modeling of the effects of agricultural trade policy reform hertel clearly further work in modelling policy outcomes in noncompetitive markets is important we focus on a particular aspect of this agenda how to handle empirically the effect of nontariff barriers ntbs in oligopolistic markets importance of ntbs in trade policy analysis

looking ahead optimally in allocating aid summary the collier dollar approach to aid allocation among countries has been less than fully embraced by donors even those focused on poverty reduction partly because it conflicts with the approach to aid allocation implied by the millennium development goals these two approaches are shown to be special cases of a more general model of aid allocation in which donors care about future as well as current poverty this model is illustratively applied to data for developing regions adding a poverty decline adjustment to the allocation formulae used by donors could resolve the conflict between the two approaches

antidumping protection and r d competition in recent years antidumping protection has spread throughout the world evidence shows that antidumping often targets r d intensive sectors raising a con cern that it may adversely affect worldwide investments in r d we investigate this issue in a model of reciprocal dumping extended to a two stage game in which two firms first choose r d levels and then compete in prices we find that when a single government institutes antidumping law the protected firm decreases investment in r d while the constrained firm invests more when both governments engage in antidumping actions both firms invest more in r d than under free trade jel classification f12 f13

endogenous probability of protection and firm behavior abstract this paper studies the strategic reactions of firms to protectionist policies that are enforced with endogenous probability this probability is a function of firms actions firms in the country that may adopt the protectionist measures try to increase the probability of sanctions while foreign firms try to reduce this probability a simple framework is used to derive general results for uncertain protection this framework is used to analyze the responses to specific protectionist policies such as antidumping legislation and restrictions on the import market share finally the paper studies the welfare implications of the model

project evaluation and uncertainty in practice a statistical analysis of rate of return divergences of 1 015 world bank projects this article analyzes the world bank s experience with project evaluation for a sample of 1 015 projects by comparing estimated rates of return at appraisal with reestimated rates of return when construction works are completed usually 5 to 10 years after appraisal the analysis highlights the high degree of uncertainty in project analysis a wide range of variables has been introduced to explain the observed divergence in appraisal and reestimated rates of return but only a relatively small part of the divergence can be explained even with the benefit of hindsight project analysis thus has to cope with a large degree of uncertainty which the traditional methods of project evaluation and selection have not been able to reduce

on the simultaneous elimination of export subsidies under oligopoly this article extends the model of brander and spencer 1985 to study whether the simultaneous elimination of export subsidies is feasible it is shown that the incentive for subsidizing exports to reoccur will exist when all subsidizing countries are forced to withdraw their subsidies on exports simultaneously

tariffs quality reversals and exit in vertically differentiated industries abstract in a vertically differentiated industry a domestic and a foreign firm first choose the quality of their goods and then compete in quantities or prices in the home market we investigate the cases in which a tariff is chosen before or after the firms quality decision these cases are referred to as the ex ante and the ex post game respectively optimal ex post tariffs are positive and ensure that the domestic firm always produces the high quality good the optimal ex ante tariff is prohibitive and welfare under domestic monopoly is lower than under ex post tariffs unless firms compete in prices and the domestic firm is high quality

trade and trade policy with imperfect competition the case of identical products and free entry abstract this paper analyses intra industry trade between economies containing an imperfectly competitive industry in which firms produce a homogeneous output production is subject to increasing returns to scale and there is free entry and exit of firms trade is shown to unambiguously increase welfare by reducing the degree of monopoly in each market and increasing firm size the effects of differences in technology and endowments on the pattern of trade and welfare are examined import tariffs are shown to raise welfare in the country employing the tariff and the welfare implications of various types of industry subsidy are examined

anti dumping measures as a tool of protectionism a mechanism design approach in this paper we explore the design of optimal incentive compatible anti dumping ad measures when the weight given to the domestic firm s profit in the government s objective function is relatively small it is shown that no ad duty should be imposed if the foreign firm reports its own costs but a constant ad duty should be imposed if the domestic firm reports the foreign firm s cost when this weight is large in either case of reporting the ad duty is a prohibitive tariff the optimal ad measures are modified in the presence of a gatt wto constraint jel classification f12 f13 les mesures anti dumping en tant qu outil de protectionnisme une approche en termes de construction de mecanismes ce memoire examine la construction de mesures optimaales anti dumping ad quandla valence des profits de la firme domestique est faible dans la fonction objective du gouvernement on peut montrer qu aucune mesure ad ne devrait etre imposee si l entreprise etrangere revele ses propres couts mais qu un droit ad constant devrait etre impose si c est la firme domestique qui revele les couts de l entreprise etrangere quand la valence des profits de la firme domestique est grande quelle que soit la source de l information la mesure ad qui s impose est un droit de douane prohibitif les mesures optimales doivent evidemment etre modifiees pour prendre en compte la contrainte engendree par l existence des regles du gatt omc

a dynamic theory of conjectural variations this paper explores the relationship between dynamic oligopolistic competition and static conjectural variations equilibria using an infinite horizon adjustment cost model the author demonstrates that any steady state closed loop subgame perfect equilibrium coincides with a conjectural variations equilibrium in the case of linear demand and quadratic costs the dynamic conjectures consistent with closed loop steady state equilibria are negative constant symmetric and vary continuously with the discount rate and the adjustment cost parameter in an interval between the static consistent conjectures and zero cournot copyright 1992 by blackwell publishing ltd

product selection by quantity setting firms abstract hotelling suggested that competition between oligopolistic sellers would result in consumers with inelastic demands being offered products with an excessive sameness smithies extended the hotelling result to the case of elastic demand while these results are intuitively appealing it has subsequently been shown that both the two stage and simultaneous price location games suffer from fundamental non existence problems when firms do not price discriminate in this paper we investigate the smithies analysis assuming that firms compete in quantities rather than prices we show that a tendency to agglomeration is characteristic of quantity location competition but when locations and quantities are chosen simultaneously problems of non existence of equilibrium do not arise and the principle of minimum differentiation does not hold by contrast when firms play a two stage game choosing locations in the first stage and quantities in the second stage the non existence problems that characterize price location games whether simultaneous or two stage extend to the two stage quantity location game for certain parameter values

optimal policies and marketing board objectives abstract in this paper we examine optimal tax subsidy policies with export marketing boards that compete as oligopolists in world markets by taking a targeting approach to identifying optimal policies we are able to show how optimal policies vary with the objectives of board the nature of competition in world markets as well as assumptions about market segmentation and regulation in none of the cases examined does a marketing board without tax subsidy policy replicate the social optimum moreover we show that the policies necessary to attain the social optimum are quite different with the institutional variation considered arbitrage and regulation is the only case considered in which the optimal export policy is definitely a tax and in which the marketing board s objective does not affect policy

the continued dumping and subsidy offset act an economic analysis under the continued dumping and subsidy offset act cdsoa of 2000 the u s government distributes the revenue from anti dumping and countervailing duties to domestic firms alleging harm in this article we develop a simple model to examine the economic effect of the cdsoa for the case in which the offset payments to domestic firms are linked to the volume of foreign imports the cdsoa may increase foreign imports when the domestic market is more competitive than in the cournot equilibrium this finding runs contrary to what the e u and some exporting countries have claimed but if the market is less competitive than in cournot the cdsoa becomes an instrument of trade protectionism

environmental issues and economic decisions in developing countries abstract this paper explains the key role of environmental economics in incorporating environmental concerns into decision making and in facilitating the more efficient management of natural resources as a step toward sustainable development it reviews concepts and techniques for valuation of environmental impacts for use in conventional cost benefits analysis as well as key related aspects including environmental impacts of economywide policies multicriteria analysis risk and uncertainty and discount rate issues several developing country case studies are summarized which cover a range of practical valuation methods the evidence presented suggests that the valuation techniques for determining use values may be applied successfully in appropriate cases but examples involving nonuse values are rare the use of multiobjective desicion methods also needs to be explored where economic valuation is not feasible

market uncertainties and cyclical dumping abstract the paper formulates a theory of the firm to analyze the incidence of cyclical dumping in foreign markets in the forms of price discrimination as well as less than marginal cost cyclical dumping arises due to fluctuations in demand in home and foreign markets and the firm s inability to fully adjust its output to these fluctuations the paper analyzes the impacts of various shocks on the current and future incidence of both types of dumping within a unified framework

quantitative restrictions and tariffs with endogenous firm behavior abstract this paper considers a foreign oligopoly which dominates an importing country s market with its exports of differentiated products it constructs a model where firm behavior is endogenously determined in an infinitely repeated game and it analyzes the impact of trade policies on market conduct and welfare optimal tariffs optimal quotas and optimal tariff quotas are characterized and compared one result is that quotas can enhance competition and increase welfare another result is that quotas can be superior to tariffs finally optimal tariff quotas are welfare superior to either tariffs or quotas alone

has the byrd amendment affected us imports the continued dumping and subsidy offset act cdsoa also known as the byrd amendment allows the u s government to distribute revenues from antidumping duties to domestic firms alleging harm prior to the amendment these revenues were not distributed to firms in this article we formally test the hypothesis that the byrd amendment effectively provides double protection to u s firms to the extent that it further restricts u s imports as argued by the e u and eleven other u s trading partners using a rich panel of 362 u s manufacturing industries for the period 1998 to 2003 we find that whether or not the byrd amendment restricted u s imports depends crucially on the level of competitiveness in the import competing industry specifically we find that the byrd amendment served to restrict imports only in industries where competition is relatively weak while the amendment is associated with an increase in imports in more competitive industries

optimal policies with strategic distortions abstract this paper analyzes the jointly optimal levels of a variety of policy instruments when markets are imperfectly competitive a targeting principle to identify optimal policies under imperfect competition is derived using the concept of a strategic distortion this allows us to interpret when trade policy is first best and links the literature on optimal policies with imperfect competition to the standard targeting literature we show that optimal tax subsidy policy depends crucially on the presence of other regulations and assumptions about market segmentation

policy cooperation among benevolent governments may be undesirable this paper presents a simple counterexample to the belief that policy cooperation among benevolent governments is desirable it also explains circumstances under which such counterexamples are possible and relates them to the literature on time inconsistency since the work of hamada 1976 investigating the effects of increasing policy cooperation among countries has been a major topic in international economics a standard conclusion of this work is that increasing policy cooperation among countries is desirable in a seminal paper rogoff 1985 has challenged this view using a simple monetary model rogoff shows that cooperation among policy makers can lead to a lower level of welfare than noncooperation does rogoff s result has caused much consternation among those who advocate policy cooperation and his work has been criticized along several dimensions for example some authors including canzoneri and henderson 1988 have noted that a key assumption in rogoff s model is that the objective function of each country s policy maker does not coincide with the objective function of its residents indeed if in his model policy makers maximize the welfare of their country s residents the counterexample is overturned and cooperation strictly dominates noncooperation this feature leads some to interpret rogoff s result as simply saying that if policy makers form a coalition against the private sector they may be worse off than if they do not others such as neck and dockner 1988 have claimed that rogoff s result depends on private agents acting strategically under this interpretation rogoff s result is relevant to say economies with a large trade union but not to economies with a large number of competitive private agents in a somewhat different vein persson 1988 and especially devereux 1986a b have questioned the significance of welfare comparisons across different institutional regimes in a model without a solid foundation for the behavioural relationships this paper presents a simple model in which governments are benevolent but cooperation is still undesirable the model is a two country version of fischer s 1980 optimal tax model in it private agents are competitive in that each agent takes both prices and government policies as uninfluenced by his actions and each government maximizes the welfare of its country s residents in the paper the two different regimes cooperative and noncooperative

how the european union s and the united states anti dumping duties affect taiwan s pv industry a policy simulation abstract to address continuous increases in global energy demand countries around the world are developing coping plans that promote the development of renewable energy industries a major focus of these nations efforts is the photovoltaic pv industry since 2014 the european union eu and the united states have imposed anti dumping duties on pv industries in china and taiwan because the development of the pv industry is affected by relevant government policies taiwan is ranked second in the world in pv production and these duties will undoubtedly affect the future development of taiwan s pv industry thus pv manufacturers and the taiwanese government are extremely concerned about the impact of the anti dumping duties imposed on taiwan s pv industry in fact the development structure of the pv industry is complex and dynamic in this study by assessing industry characteristics the extant literature and responses from interviews with experts system dynamics sd is used to identify three key loops and explore the structure of the development of taiwan s pv industry finally trends in production capacity and financial conditions imposed by anti dumping duties on taiwan s pv industry are simulated to address the impact that different anti dumping duty rates could produce repeated simulations are conducted to determine the critical rate at which this industry may disappear in addition relevant topics are discussed and viable policy recommendations are proposed

the non equivalence of tariffs and quantity restraints as rent shifting policies in a differentiated oligopoly with quantity as the strategic variable an optimal tariff can lead to a welfare gain when a quantity restraint is used instead this gain can be offset since the quota induces anticompetitive effects however alternative quantity restraints such as import quotas or voluntary export restraints whether specified in volume or ratio form will influence the strength of the anticompetitive effect in this paper the authors evaluate empirically the degree of nonequivalence between alternative trade instruments and the factors that likely influence it

up the average cost curve inefficient entry and the new protectionism abstract a two country model is developed in which each country produces one good with increasing returns the goods being perfect or imperfect substitutes with cournot nash behavior and free entry certain restrictive trade policies have effects opposite to their favorable effect under noentry assumptions import tariffs and export subsidies lead to inefficient entry that raises rather than decreases the average production cost of and price charge by the domestic industry with negative welfare consequences we argue that these predictions of our model are closely consistent with extensive canadian data on entry exit and firms responses to trade liberalization

ecology sustainability and environment as capital abstract the idea of environment as capital has found widespread support in both the economic and ecological literature it is often suggested in a related sustainability literature that natural capital should remain intact if possible the popularity of this approach to exploring the human environment relationship is due in part to the way it is seemingly legitimised by ecological theory and practice this legitimation is important for emerging areas of human environment study such as ecological economics because ecology and other natural sciences have often dismissed economic constructions of the environment however a closer examination of the state of contemporary ecology suggests that there are problems with an ecological legitimation of the environment as capital approach first ecology itself is a troubled discipline and its ability to provide a comprehensive theory of human environment interactions is limited second emerging ecological discourse tends to undermine the ecological rationale for many natural capital related resource management recommendations this does not mean that the environment as capital concept is without considerable heuristic power it does imply however a need to return to a social construction of the environment in which different environmental possibilities are valued in terms of their potential contribution to human well being

capital subsidies and countervailing duties in oligopolistic industries abstract under gatt countries are allowed to impose countervailing duties to offset foreign subsidies however gatt rules limit the amount of duty to the amount of the subsidy this paper examines a generalized model of imperfect competition with capital subsidies and shows the conditions under which a countervailing duty will offset the effect of the subsidy on exports also conditions are specified under which exports will increase despite the imposition of the maximum tariff under gatt in addition the paper considers whether profit shifting motives for a subsidy still exist even when this maximum duty is anticipated

the ambiguous consequences of anti dumping laws the anti dumping law is most often applied in oligopolistic industries while most analyses focus on the monopoly model i analyze a duopoly model where a foreign firm engages in price based dumping under cournot behavior the anti dumping law has ambiguous price and welfare effects when the home firm is a stackleberg leader two disquieting effects emerge first the home firm can use the anti dumping law to curtail competition even when the foreign firm does not initially engage in dumping second the anti dumping law can increase profits of both firms at the expense of domestic consumers

anti dumping and countervailing duties under oligopoly abstract this paper constructs a conjectural variations model of international oligopoly in which the home country s optimal policy responses to the foreign government s subsidies and foreign firms dumping can be calculated some theoretical support is found for tariffs that countervail part of the foreign export subsidy the optimal fraction depends on the size of own and cross effects in demand and on the extent of market competition however no normative case is found for anti dumping duties

the effect of domestic antidumping law in the presence of foreign monopoly abstract we analyze the effects of antidumping law when utilized by competitive domestic petitioners against a foreign monopolist the monopolist reduces the cost of holding excess capacity in periods of slack foreign demand by dumping on the domestic market antidumping law reduces trade volume both directly under successful petitions and indirectly when no petition is filed by causing the monopolist to alter its capacity and the allocation of that capacity between markets finally we consider the effects of self enforcing agreements in which the domestic industry agrees not to file in exchange for a promise that the foreign monopolist limit exports

conjectural variations and location theory abstract imperfectly competitive markets such as those involving spatial separation of producers and consumers are characterized by interactions between competing firms actions call forth reactions and the possible reactions form an important part of the information set that should be used to determine the initial actions one method for dealing with this is the conjectoral variation approach despite some shortcomings this methodology sheds considerable light on decision making in the space economy equally importantly it sheds light on more general microeconomies modelled as spatial analogs this paper shows that conjectural variations and the nature of competition between rival firms do indeed matter in location choice and more generally in product design in particular we shall be concerned with showing how the conjectured responses of rival firms affect their desire to agglomerate

dynamic factor demands and the effects of energy price shocks a dynamic model is used to understand how sharp changes in energy prices affect investment behavior employment and energy use the authors discuss the theory behind their model selection model specifications estimation methods and data list parameter estimates and elasticities for the selected model and describe the simulations they conclude that 1 the data strongly reject the hypothesis of constant returns to scale within their specification of aggregate production 2 the data indicate adjustment costs on labor are small and 3 their results help reconcile some of the conflicting estimates of energy demand elasticities appearing in recent literature 23 references 3 figures 3 tables

strategic tariffs and endogenous market structures trade and industrial policies under imperfect competition abstract this paper examines strategic tariff policy tariff induced entry and endogenous market structures in a developing country setting it improves on recent theoretical treatments of optimal trade policy under imperfect competition by allowing for forward looking import substituting investment induced by an anticipated time consistent tariff policy it shows that the optimum tariff is robust across a subset of market structures and cost and demand specifications however it will usually involve insufficient or excessive entry by domestic firms and consequently industrial policy of various kinds is a necessary supplement to strategic tariff policy

consistent tariffs with dynamic supply response abstract this paper models a large importer of a competitively produced good for which there are nonlinear adjustment costs in production if producers have rational expectations and the importer is unable to make a credible commitment regarding future tariffs market power may be disadvantageous this is more likely to occur when the difference between short and long run elasticities of supply are large this result depends on the particular subgame perfect equilibrium that is chosen if producers were capable of strategic behavior other equilibria which rely on trigger strategies would be reasonable and market power could no longer be disadvantageous

the welfare effects of imperfect harmonisation of trade and industrial policy in recent years several countries have made major efforts to coordinate trade and industrial policies examples include the united states canada free trade agreement and the european attempt to complete the e c internal market by the year i992 the design of welfare improving policy reform is complicated by the presence of a large number of policy induced distortions and by the imperfectly competitive nature of many industries it is well known that the nominal reduction of a set of distortions holding other distortions fixed does not necessarily improve welfare this conclusion which arises because the reform occurs in a second best environment certainly survives the introduction of imperfect competition we examine additional complications that arise when reform is carried out under conditions of imperfect competition this subject which is of general theoretical interest is also of immediate practical interest due to the current attempts to harmonise european trade and industrial policies the principal conclusion is that limited cooperation as occurs in customs unions may be worse for members of the union than no cooperation this possibility arises because comparison of welfare under the two situations no cooperation and partial cooperation amounts to a comparison of two second best equilibria such a comparison is in general ambiguous an alternative explanation of the result is that different degrees of cooperation induce different games a comparison of the equilibria of these different games is in general ambiguous in view of this the possibility of disadvantageous cooperation is not surprising this paper identifies circumstances under which the possibility is likely we study the case where countries that form the union i e cooperate coordinate trade policy in an attempt to alter the incentives faced by imperfectly competitive domestic industries for simplicity we assume that these industries each of which is treated as a single firm produce for export only we analyse three variations of a partial equilibrium trading model which illustrate different reasons why limited cooperation may be worse than no cooperation for members of a union we study complete information subgame perfect equilibria section i considers the case where n firms each identified with a different

integration of environmental concerns into economic analyses of projects and policies in an operational context abstract the efficient use of natural resources both mineral and biological as well as man made capital and human resources is a vital prerequisite for economic and social development one key role of ecological economics is to help value environmental and natural resources more precisely and internalize the cost and benefits of using such resources into the decision making process this paper reviews current economic approaches to the analysis of projects and policies and discusses possibilities for better intergrating environmental concerns into public decision making it reviews current practices as they relate to project analysis the analysis of economic policies and national income accounting a major need at present is not for more theory or techniques but for application of existing methodology and approaches to concrete problems particularly in developing countries the major objective should not be to provide fine turned numbers but to indicate orders of magnitude some project and policy alternatives can be ruled out in this fashion also one can often identify the key estimates to which the decision is sensitive and focus more refined analyses on them cost benefit analysis should be used to the extent possible alongside one needs to consider and to the extent possible rigorously analyze consequences and risks that cannot be measured in monetary terms and use for example multi criteria analysis where possible this together with sound judgement are at present the best inputs into decision making

export subsidies and countervailing tariffs this paper analyses how retaliation affects the profit shifting argument for export subsidies at the first stage the foreign country sets its export subsidy and then at the second stage the domestic country sets its tariff and or production subsidy it is shown that if the domestic country pursues an optimal trade policy then it will always gain from a foreign export subsidy when the domestic country uses a tariff and a production subsidy the optimal foreign policy is an export subsidy but if the domestic country only uses a tariff then an export tax is usually the optimal policy

government intervention in imperfectly competitive agricultural input markets the frequent demands for protection by the fertilizer industry in many developed countries may have important implications for the agricultural sector this paper provides a theoretical justification for government intervention in the fertilizer market in the form of an import tariff against foreign competitors however a superior policy would be for the government to counter the competitive distortion that exists in the market an even better outcome is attained by using both policies simultaneously moreover since the fertilizer industry undergoes continuous structural change the extent to which optimal policies should vary is also investigated

trade policy and quality leadership in transition economies trade policy and quality leadership in transition economies are analyzed in a duopoly model of trade and vertical product differentiation we first show that the incidence of trade liberalization is sensitive to whether firms in transition economies are producers of low or high quality second we find that neither free trade nor the absence of a domestic subsidy are optimal both a tariff and a subsidy increase price competition and while the former extracts foreign rents the latter results in quality upgrading third there exists a rationale for a government to commit to a socially optimal policy to induce quality leadership by the domestic firm when cost asymmetries are low finally we establish an equivalence result between the effects of long run exchange rate changes and those of trade policy on price competition but not on social welfare

why can t countervailing duties deter export subsidization abstract this paper shows that in a duopoly model of international market competition threatened imposition of countervailing duties by a domestic country generally deters a foreign country from subsidizing its exports to the former to explain the coexistence of export subsidization and the gatt conform countervailing duty measures factors such as delay in retaliation the gatt constraint on the amount of countervailing duties and voluntary export restraints must be considered we find that these factors lessen the efficacy of countervailing duty retaliation and therefore fail to deter export subsidization

production effects of price and cost based anti dumping laws under flexible exchange rates this paper investigates the production response of an exporting firm when faced with the threat of an anti dumping ad action the firm s production decision is sensitive to market conditions at home and abroad as well as to the definition of dumping we examine the incentives facing the exporting firm under price based marginal cost based and average total cost based anti dumping laws depending on the nature of the anti dumping rules and market conditions a firm s production may rise fall or remain unchanged in response to ad legislation les effets de production des lois anti dumping fondees sur les prix et sur les couts dans un