Suchergebnisse

The welfare effect of an intra-industry trade liberalization between two different countries is studied in this paper. Firms are firstly assumed to behave à la Cournot, results are then generalized in a conjectural variation model. If trade liberalization increases "world"welfare, it is nevertheless true that one country should be better off in the autarkic situation.The crucial parameters for evaluating the convenience of opening the market to foreign competition are the relative dimensions of domestic and foreign market and industry. In general small countries with oligopolistic industries have greater advantages from free trade. Consumers gains from trade liberalization are shown to be important, to open the market may , in fact, be considered a second-best competition measure if antitrust policy is not in place. Unilateral trade liberalization is studied; an example of Nash Equilibrium in policy, where only one country opens its market to foreign competition is furnished.

This paper investigates how the devolution of oil windfalls affects the likelihood of political violence. It shows that transferring large shares of oil wealth can prevent conflict, while transferring small shares can trigger it. Among the different transfer schemes, fiscal transfers (to subnational governments) yield the highest levels of consumption, but direct transfers (to people) are the most effective in preventing conflict. By averting conflict, transfers can improve ex ante welfare; however, only a subset of the ex ante welfare optimal transfers is optimal ex post and thus self-enforcing. Among them, those that avert conflict by reinforcing repressive regimes are of particular policy interest.

Is generalized debt relief an effective development strategy, or should assistance be tailored to countries' characteristics? To answer this question, the authors build a simple model in which recipient governments reveal their creditworthiness if donors offer them to choose between aid and debt relief. Since offering such a menu is costly, it is preferred by donors only when the cost of assistance is low, and the probability that an indebted country is creditworthy is high enough. For lower probabilities and higher costs of assistance, donors prefer a policy of only debt relief. Very limited aid is the preferred policy only for high costs of assistance, and low probabilities that the government is creditworthy.