Do countries free ride on MFN?
成果类型：
Article
署名作者：
Ludema, Rodney D.; Mayda, Anna Maria
署名单位：
Georgetown University; Georgetown University
刊物名称：
JOURNAL OF INTERNATIONAL ECONOMICS
ISSN/ISSBN：
0022-1996
DOI：
10.1016/j.jinteco.2008.08.004
发表日期：
2009
页码：
137-150
关键词：
摘要：
The Most-Favored Nation (MFN) clause has long been suspected of creating a free rider problem in multilateral trade negotiations. To address this issue, we model multilateral negotiations as a mechanism design problem with voluntary participation. We show that an optimal mechanism induces only the largest exporters to participate in negotiations over any product, thus providing a rationalization for the Principal supplier rule. We also show that, through this channel, equilibrium tariffs vary according to the Herfindahl-Hirschman index of export shares: higher concentration in a sector reduces free riding and thus causes a lower tariff. Estimation of our model using sector-level tariff data for the U.S. provides strong support for this relationship. (C) 2008 Elsevier B.V. All rights reserved.
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