Reducing Distortions in International Commodity Markets
World commodity markets and particularly the markets for agricultural commodities remain highly distorted despite the wave of liberalization that has swept world trade since the 1980s. Commodity markets are distorted on both the export and the impo...
| Main Authors: | , |
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| Format: | Brief |
| Language: | English |
| Published: |
World Bank, Washington, DC
2012
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2012/05/16282014/reducing-distortions-international-commodity-markets http://hdl.handle.net/10986/10041 |
| Summary: | World commodity markets and particularly
the markets for agricultural commodities remain highly
distorted despite the wave of liberalization that has swept
world trade since the 1980s. Commodity markets are distorted
on both the export and the import sides, with serious
implications for world prices and their volatility. Very few
of the price distortions found in commodity markets can be
justified on the grounds of dealing with market failures.
Rather, most policies that affect commodity prices are
designed to transfer resources to favored groups by raising
or lowering prices. Policies may target the level and/or the
volatility of prices, and the pursuit of one type of policy
objective may have unintended consequences in generating
further distortions. Moreover, some commodity markets are
characterized by imperfect competition. Where monopolies or
oligopolies in trade arise, either because of government
regulation or through other barriers to entry, distortions
may arise that call for application of antitrust laws and
other forms of pro-competitive policy action. |
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