POLI SCI 240 Lecture Notes - Lecture 15: Marshall Plan, Fixed Price, Most Favoured Nation
29 Mar 2018
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Regimes: rules and procedures that regulate international behavior. All actors should benefit from pure liberal trading regime (staghunt game: cc> However, international trade often looks like a prisoner"s dilemma game b/c of deviations from pure liberal trade (ex. bailouts) A: neo-mercantilists: late development and government led growth (pursue protectionism, subsidize key industries) B: defection due to domestic political reasons (favored constituencies; including us)\ C: different views on state-society relations (health codes, safety standards, privacy issues, etc. ) Creating a stable trade regime provides for a collective good (non-exclusivity) Collective goods are a multi-person pd (dc>cc>dd>cd) Provision of collective good (stable liberal economic regime) requires leadership. Small group (if everyone can agree on principles) Dominant economic power benefits more than others. Us didn"t want agriculture to be international sector. Security imperatives (the connections between international economy. Establishing and defending a stable exchange rate. Ensure liquidity in the system (countercyclical lending) Britain: dominant power of the 19th century.
