Multilateral Trade Liberalization and Political Disintegration : Implications for the Evolution of Free Trade Aareas and Customs Unions
The author combines two theories - one about how multilateral trade liberalization affects regional integration, the other about how it affects political disintegration - to explain why the ratio of free trade areas to customs unions has increased...
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2014
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| Online Access: | http://documents.worldbank.org/curated/en/2000/05/437227/multilateral-trade-liberalization-political-disintegration-implications-evolution-free-trade-areas-customs-unions http://hdl.handle.net/10986/18851 |
| Summary: | The author combines two theories - one
about how multilateral trade liberalization affects regional
integration, the other about how it affects political
disintegration - to explain why the ratio of free trade
areas to customs unions has increased over time. Ethier
argues (1998, 1999) that multilateral trade liberalization
led to the recent wave of regional integration arrangements.
Alesina and others (1997), in discussing the number and size
of countries, argue that multilateral trade liberalization
leads to political disintegration, with an increase in the
number of countries. Combining the two arguments, the author
hypothesizes that as multilateral trade liberalization
proceeds, and the number of regional integration
arrangements increases, the ratio of free trade areas to
customs unions also increases. The data, which show that
ratio increasing in the 1990s, are consistent with the hypothesis. |
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