Suchergebnisse

THE AUTHOR EXAMINES THE RECENT TRADE DISPUTE BETWEEN THE UNITED STATES AND JAPAN CONCERNING THE AUTOMOBILE INDUSTRY AS AN ILLUSTRATION OF THE SHORTCOMING OF US TRADE POLICY UNDER THE CLINTON ADMINISTRATION, IN RESPECT OF TWO MAIN ISSUES: AGGRESSIVE UNILATERALISM, AND DEMANDS FOR MANAGED TRADE IN THE FORM OF "VOLUNTARY IMPORT EXPANSION." HE ARGUES BOTH THE US COMPLAINTS AGAINST JAPAN WERE ILL-FOUNDED AND THAT THE METHODS CHOSEN BY THE US ADMINISTRATION, AND IN PARTICULAR BY THE US TRADE REPRESENTATIVE MICKEY KANTOR, TO PURSUE THEM WERE POLITICALLY MISCONCEIVED, INCONSISTENT WITH THE UNITED STATES' DECLARED ALLEGIANCE TO THE MULTILATERAL TRADING SYSTEM, AND DAMAGING BOTH TO THAT SYSTEM AND TO US-JAPAN TRADE RELATIONS. THE FAILURE OF THE US STRATEGY, HE ARGUES, IS UNSURPRISING AND WELCOME, AND US-JAPAN TRADE RELATIONS SHOULD NOW BE NORMALIZED.

ALTHOUGH THE DEBATE OVER THE NORTH AMERICAN FREE TRADE AGREEMENT (NAFTA) WILL BE LOUD AND DISTRACTING, ITS PASSAGE SEEMS ASSURED, ALBEIT WITH SOME TOUGHER ENVIRONMENTAL AND LABOR STANDARDS. THIS ARTICLE ARGUES THAT IT IS TIME FOR PRESIDENT CLINTON TO PLAN HIS NEXT STEP ON TRADE. HE MUST NOW DECIDE WHETHER TO CONTINUE WITH A FREE TRADE AREA (FTA) APPROACH, BE IT GLOBAL OR CONFINED TO THE AMERICAS, OR TO THROW HIS WEIGHT EXCLUSIVELY BEHIND A MULTILATERAL APPROACH BASED ON THE GENERAL AGREEMENT ON TARIFFS AND TRADE (GATT). IT CONCLUDES THAT THE PRESIDENT SEEMS TO BE HEADED DOWN THE LEAST ATTRACTIVE OF THOSE PATHS: THE EMBRACE OF MORE REGIONAL FTAS IN THE AMERICAS ALONE.

THIS ARTICLE CONCENTRATES ON TWO QUESTIONS: (1) DOES DEMOCRACY REQUIRE A MARKET ECONOMY? AND (2) CAN A MARKET ECONOMY EXIST WHEN DEMOCRACY DOES NOT? IT CONCLUDES THAT EMPIRICAL EVIDENCE TO DATE SHOWS NO EXAMPLE OF A DEMOCRACY THAT IS OR WAS FULLY SOCIALIST. THEREFORE, DEMOCRACY DOES REQUIRE A MARKET ECONOMY. EMPIRICAL EVIDENCE ALSO DEMONSTRATES THAT A MARKET ECONOMY CAN EXIST IN ABSENCE OF DEMOCRACY, THEREFORE, A MARKET ECONOMY IS A NECESSARY, BUT NOT A SUFFICIENT CONDITION FOR DEMOCRACY. THE ARTICLE ALSO CONSIDERS THE "CRUEL CHOICE": WHETHER DEMOCRACY IS SUSTAINABLE IF IT DISCOURAGES ECONOMIC DEVELOPMENT. IT ALSO EXAMINES THE ISSUE OF SEQUENCING: WHETHER DEMOCRACY SHOULD PRECEDE OR FOLLOW A MARKET ECONOMY. IT CONCLUDES THAT BOTH OF THE LATTER QUESTIONS HAVE YET TO BE SATISFACTORILY DEALT WITH.

Telling governments what to do is an ancient and important tradition in economics. Predicting what governments will do, i.e., endogenizing policy, is a newer activity, but one of growing prominence. The two activities appear incompatible: if what governments do is the result somehow of equilibrium behavior of self‐interested actors, then advising governments is as senseless an activity as advising monopolists to lower prices or advising the San Andreas fault to be quiet. We show why and how advising can sometimes be a sensible activity, even when we hold sophisticated views about how governments operate.