In a three-country Customs Union (CU) formation game, I introduce international trade in intermediate inputs and Rules of Origin (RoO) restrictions. In the case of symmetric countries, I show that as countries become more involved in global supply chains, global free trade is less likely to be a...

Why is further multilateral trade liberalisation proving so difficult to achieve? This paper shows that Article XXIV itself, the set of WTO rules governing trade block formation, undermines the multilateral liberalisation process. Trade block formation under Article XXIV can be thought of as a...

The Kemp-Wan proposition on the existence of Pareto-improving customs union is extended by allowing the customs union to make trade agreements with non-members. We show that given some unused gains from trade a customs union improving its member' welfare with unchanged non-members' welfare...

In this paper, we develop a political economy model to study the decision of representative democracies to join a preferential trading agreement (PTA), distinguishing between free trade areas (FTA) and customs unions (CU). Our theoretical analysis suggests that income inequality and bilateral...

This paper studies the economic impact of regionalism under the realistic assumptions of constant tariffs and asymmetric bloc formation. Extending the Krugman framework, we decompose the impact into several components, each of which has a clear economic implication. Economic integration...

Based on static analysis, a number of studies argue that forming a RTA is more likely to raise welfare if member countries are ?natural trading partners,? while other studies claim the opposite. This paper considers the argument from a dynamic viewpoint by examining the impact of trade with...

We study the relationship between participation in free trade agreements (FTAs) and the sustainability of democracy. Our model shows that FTAs can critically reduce the incentive of authoritarian groups to seek power by destroying protectionist rents, thus making democracies last longer. This...

This paper discusses the issue whether developing countries forego chances in world manufactured markets by protecting intermediate services against market entry of new suppliers. By scanning the empirical literature on effective rates of protection (ERP), the evidence is supportive. Yet, it...

This paper identifies factors associated with takeoff - a sustained period of high growth following a period of stagnation. We examine a panel of 241 stagnation episodes" from 146 countries, 54 % of these episodes are followed by takeoffs. Countries that experience takeoffs average 2.3% annual...