POLS 3313 Lecture Notes - Lecture 16: Tom Thabane, Jus Soli, Letsie Iii Of Lesotho
25 Oct 2018
School
Department
Course
Professor
16 - OCT 17
PROTECTIONISM
COUNTRY OF THE DAY: LESOTHO
Originally settles by Bantu speakers.
First unified by Chief Moshoeshoe I in 1822.
1868: British protectorate.
Plans to transfer Lesotho to South Africa halted with apartheid.
1966: Gains full independence as a constitutional monarchy.
Constitutional monarchy under King Letsie III and Prime Minister Tom Thabane.
Highest low point in the world (about 4600 ft above sea level).
Jus soli citizenship.
POPULARITY
Trade barriers harm aggregate welfare.
Also redistribute the surplus.
Wide gulf between economists and the public.
Key reason: losses are visible.
UNINTENDED CONSEQUENCES
1934: Jones-Costigan Amendment passed to reduce imports of sugar.
Tariffs and quotas on sugar imports.
USDA statistics from February 2018:
World average: 13.56 cents per pound.
US Average: 25.83 cents per pound.
Consumer who buys 5lbs of sugar a year is “taxed” about 60 cents.
WHO BENEFITS?
WHO WANTS PROTECTION?
Protection benefits producers at expense of consumers.
Which producers want protection?
Two theories:
STOPLER-SAMUELSON
Trade benefits abundant factor.
Owner(s) of scarce factor(s) (import competitors) factor
restrictions.
Owners of abundant factor(s) (exporters) favor free trade.
Eg) Labor unions in the US.
RICARDO VINER
Attitudes based on sector.
Factors are not mobile.
All factors in import-competing sectors will favor
protectionism.
Document Summary
First uni ed by chief moshoeshoe i in 1822. Plans to transfer lesotho to south africa halted with apartheid. 1966: gains full independence as a constitutional monarchy. Constitutional monarchy under king letsie iii and prime minister tom thabane. Highest low point in the world (about 4600 ft above sea level). 1934: jones-costigan amendment passed to reduce imports of sugar. Consumer who buys 5lbs of sugar a year is taxed about 60 cents. Owner(s) of scarce factor(s) (import competitors) factor restrictions. Owners of abundant factor(s) (exporters) favor free trade. All factors in import-competing sectors will favor protectionism. Logrolling trading votes in order to pass legislation. Instrumental in passing the smoot-hawley tari in 1930. March 2002: president bush implements a temporary tari on imported steel. Most favored nation agreement to provide concessions granted to any other state. Regional trade agreement agreement among three or more nations in a region to reduce trade barriers. Advantage: ease trade relations with important trading partners.
