Coercive Trade Policy

B-Tier
Journal: American Economic Journal: Microeconomics
Year: 2019
Volume: 11
Issue: 3
Pages: 225-56

Score contribution per author:

1.005 = (α=2.01 / 2 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

Coercion is used by one government (the "sender") to influence the trade practices of another (the "target"). We build a two-country trade model in which coercion can be exercised unilaterally or channeled through a "weak" international organization without enforcement powers. We show that unilateral coercion may be ineffective because signaling incentives lead the sender to demand a concession so substantial to make it unacceptable to the target. If the sender can instead commit to the international organization's dispute settlement mechanism, then compliance is more likely because the latter places a cap on the sender's incentives to signal its resolve.

Technical Details

RePEc Handle
repec:aea:aejmic:v:11:y:2019:i:3:p:225-56
Journal Field
General
Author Count
2
Added to Database
2026-01-24