Shrinking Policy Space 21.04

8/6/2019 Shrinking Policy Space 21.04

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Policy Space: A Historical PerspectivePolicy Space: A Historical Perspective

The phenomenon of shrinking policy space is not aThe phenomenon of shrinking policy space is not anew one.new one.

InIn thethe daysdays ofof colonialcolonial imperialism,imperialism, thethe strongerstrongercountriescountries werewere ableable toto restrictrestrict thethe policypolicy spacespace ofofweakerweaker countriescountries inin mostmost balantbalant mannermanner..

Shrinking Policy Space: ReferenceShrinking Policy Space: Referenceto Trade & Industrial Policyto Trade & Industrial Policy


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Colonial ImperialismColonial Imperialism

-- UnderUnder RobertRobert Walpole,Walpole, thethe UnitedUnited KingdomKingdom

bannedbanned productionproduction ofof valuevalue addedadded newnew rollingrolling steelsteelmillsmills inin AmericaAmerica andand thethe AmericaAmerica hadhad toto settlesettle forforlowlow valuevalue pigpig andand barbar ironiron..

-- TheThe cottoncotton textiletextile calicoescalicoes ofof IndiaIndia werewere bannedbanned

byby BritisherBritisher forfor importsimports fromfrom IndiaIndia inin 1818thth centurycenturyandand thethe IndianIndian CottonCotton TextileTextile IndustryIndustry waswasdestroyeddestroyed..

-- HighHigh valuevalue addedadded manufacturingmanufacturing waswas outlandedoutlanded inincoloniescolonies..



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-- InIn 16991699,, thethe BritisherBritisher prohibitedprohibited itsits coloniescolonies toto

exportexport WoolenWoolen clothcloth toto otherother countriescountries (the(the WoolWoolAct)Act) essentiallyessentially destroyingdestroying IrishIrish WoolenWoolen industryindustry..

-- EncouragementEncouragement toto primaryprimary productionproduction inin ColoniesColoniessoso asas toto divertdivert fromfrom manufacturing manufacturing whichwhich mightmight

clashclash colonizerscolonizers interestsinterests andand ensureensure cheapcheap rawrawmaterialmaterial toto manufacturermanufacturer ofof hosthost countrycountry..



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Use of tariffs was yet another instrument.Use of tariffs was yet another instrument.

ExEx:: TheThe BritishBritish putput somesome importimport tariffstariffs onon importimportofof cottoncotton textilestextiles toto IndiaIndia forfor purepure revenuerevenuereasons,reasons, thethe locallocal manufacturersmanufacturers werewere putput toto samesametarifftariff onon thethe pleaplea ofof levellevel playingplaying fieldfield.. Eventually,Eventually,

thethe pressurepressure ofof BritishBritish manufacturermanufacturer waswas intenseintensethatthat itit hadhad toto bebe withdrawnwithdrawn finallyfinally..



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Semi ColoniesSemi Colonies

-- Unequal TreatiesUnequal TreatiesExample: Britain with Brazil in 1810Example: Britain with Brazil in 1810

The Nanking Treaty (1842) of ChinaThe Nanking Treaty (1842) of China



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EverEver--Shrinking Policy Space : World Bank & IMFShrinking Policy Space : World Bank & IMF

TheThe currentcurrent phasephase ofof shrinkageshrinkage inin policypolicy spacespacestartedstarted inin thethe 19801980s,s, whenwhen thethe WorldWorld BankBank andand thethe

IMFIMF massivelymassively expandedexpanded theirtheir programme programme (as(asopposedopposed toto project)project) loansloans inin thethe aftermathaftermath ofof thethedebtdebt crisiscrisis inin 19821982 inin thethe formform ofof thethe structuralstructuraladjustmentadjustment programmesprogrammes (SAPs)(SAPs)

ManyMany ofof itsits subsequentsubsequent rere--

incarnations,incarnations, whichwhich arearetootoo numerousnumerous toto listlist andand broadenedbroadened thethe scopescopeandand enhancedenhanced thethe strengthstrength ofof thethe conditionalitiesconditionalitiesattachedattached toto theirtheir loansloans..



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InIn thethe earlyearly days,days, thethe conditionalitiesconditionalities setset byby thethe BankBankandand thethe fundfund mainlymainly concernedconcerned budgetbudget deficits,deficits,monetarymonetary expansion,expansion, privatizationprivatization andand tradetradeliberalizationliberalization..

OverOver time,time, therethere hashas beenbeen aa constantconstant missionmission creep,creep,soso muchmuch soso that,that, followingfollowing thethe 19971997 financialfinancial crisis,crisis, thetheIMFIMF waswas actuallyactually orderingordering thethe SouthSouth KoreanKorean governmentgovernment

toto givegive independenceindependence toto thethe countryscountrys centralcentral bank,bank, and,and,eveneven moremore amazingly,amazingly, tellingtelling thethe KoreanKorean privateprivate sectorsectorcompaniescompanies howhow muchmuch debtsdebts theythey cancan havehave..



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TheseThese days,days, therethere isis virtuallyvirtually nono areaarea onon whichwhich thethe

BankBank andand thethe FundFund dodo notnot havehave (often(often veryvery strong)strong)influenceinfluence democracy,democracy, judicial judicial reform,reform, corporatecorporategovernance,governance, health,health, educationeducation andand whatwhat notnot..



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EverEver--Shrinking Policy Space : Aid PolicyShrinking Policy Space : Aid Policy

Aid Aid policiespolicies ofof thethe developeddeveloped countriescountries havehave alsoalsocontributedcontributed toto thethe shrinkingshrinking ofof policypolicy spacespace.. InIn thethe oldold

days,days, thethe mainmain conditionsconditions attachedattached toto aidaid byby thethe donordonorcountriescountries waswas thatthat thethe recipientsrecipients buybuy (at(at leastleast aa certaincertainportionportion of)of) thethe goodsgoods andand thethe servicesservices neededneeded forfor thetheaidaid--fundedfunded projectsprojects fromfrom thethe nationalnational companiescompanies ofof thethedonordonor countriescountries..



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EverEver--Shrinking Policy Space : Aid PolicyShrinking Policy Space : Aid Policy

However,However, sincesince thethe 19801980s,s, thethe conditionsconditions havehave stretchedstretched

toto includeinclude policypolicy recommendationsrecommendations similarsimilar toto whatwhat thetheBankBank andand thethe FundFund demanddemand onon theirtheir loansloans.. ThisThis isis notnotsurprising,surprising, whenwhen wewe recallrecall thatthat afterafter allall thethe BankBank andand thetheFundFund areare controlledcontrolled byby thethe countriescountries thatthat areare mainmainprovidersproviders ofof foreignforeign aidaid toto developingdeveloping countriescountries..



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EverEver--ShrinkingShrinking PolicyPolicy SpaceSpace :: TradeTrade && IndustrialIndustrialPolicyPolicy

TheThe shrinkageshrinkage inin policypolicy spacespace hashas beenbeen particularlyparticularly

strikingstriking inin thethe areaarea ofof tradetrade andand industrialindustrial policiespolicies.. FirstFirstofof all,all, sincesince thethe 19801980s,s, thethe BankBank andand thethe FundFund havehavemademade tradetrade liberalizationliberalization--involvinginvolving tarifftariff cuts,cuts,tarifficationtariffication ofof quantitativequantitative restrictions,restrictions, andand thethereductionreduction inin nonnon--tarifftariff barriersbarriers (NTBs)(NTBs) aa keykey conditioncondition

attachedattached toto theirtheir loansloans..



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EverEver--Shrinking Policy Space : GATT/TRIPS/TRIMSShrinking Policy Space : GATT/TRIPS/TRIMS

TheThe conclusionconclusion ofof thethe UruguayUruguay RoundRound ofof thethe GeneralGeneralAgreementAgreement onon TariffsTariffs andand TradeTrade oror GATTGATT talkstalks inin 19941994

andand thethe subsequentsubsequent launchlaunch ofof thethe WTOWTO inin 19951995 havehavebroughtbrought hithertohitherto unthinkableunthinkable issuesissues intointo thethe arenaarena ofofmultilateralmultilateral tradetrade politicspolitics-- parentsparents (through(through thetheagreementagreement onon TradeTrade--RelatedRelated InvestmentInvestment MeasuresMeasures oror

TRIMs),TRIMs), tradetrade inin servicesservices (through(through thethe GeneralGeneralAgreementAgreement onon TradeTrade inin ServicesServices oror GATS)GATS)--andand havehave alsoalsoshrunkshrunk thethe spacespace forfor manymany ofof thethe moremore traditionaltraditionalareasareas likelike tariffstariffs..



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EverEver--Shrinking Policy Space : WTOShrinking Policy Space : WTO

WhileWhile itit isis importantimportant toto recognizerecognize thatthat therethere isis stillstillconsiderableconsiderable policypolicy spacespace inin thethe WTO,WTO, itit shouldshould notnot

bebe forgottenforgotten thatthat therethere isis aa constantconstant attemptattempt byby thethedevelopeddeveloped countriescountries toto reducereduce thethe remainingremaining spacespace..



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EverEver--Shrinking Policy Space : MIAShrinking Policy Space : MIA

ForFor example,example, inin thethe runrun--upup toto thethe CancunCancun ministerialministerialmeetingmeeting ofof thethe WTOWTO inin SeptemberSeptember 20032003,, thethe

developeddeveloped countriescountries triedtried veryvery hardhard andand failedfailed ininthethe endend toto putput thethe multilateralmultilateral investmentinvestmentagreementagreement (MIA),(MIA), whichwhich aimsaims toto makemake virtuallyvirtually allallrestrictionsrestrictions onon foreignforeign directdirect investmentinvestment (and(and possiblypossiblythosethose onon portfolioportfolio investment)investment) illegal,illegal, onon thethe WTOWTOnegotiationnegotiation agendaagenda..



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EverEver--Shrinking Policy Space : NAMAShrinking Policy Space : NAMA InIn thethe HongHong KongKong ministerialministerial meetingmeeting ofof December,December,

20052005,, thethe developeddeveloped countriescountries triedtried veryvery hardhard totoradicallyradically lowerlower industrialindustrial tariffstariffs overover thethe nextnext 1010 yearsyears

oror soso throughthrough thethe soso--calledcalled nonnon--agriculturalagricultural marketmarketaccessaccess (NAMA)(NAMA) negotiationsnegotiations..

EvenEven thoughthough thethe zerozero--tarifftariff proposalproposal mademade byby thetheUSAUSA inin DecemberDecember 20022002 isis consideredconsidered toto bebe aa

deliberatelydeliberately radicalradical openingopening gambit,gambit, thethe corecoreU

SU

Sproposalproposal isis toto bringbring averageaverage industrialindustrial tariffstariffs inindevelopingdeveloping countriescountries downdown toto 55--77 perper centcent..



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EverEver--Shrinking Policy SpaceShrinking Policy Space

WhileWhile theythey diddid notnot succeedsucceed inin securingsecuring anyany firmfirm

outcomeoutcome onon NAMANAMA inin HongHong Kong,Kong, thethe developeddevelopedcountriescountries managedmanaged toto getget anan agreementagreement onon thethe useuse ofofsoso--calledcalled SwissSwiss formula,formula, whichwhich meansmeans steepersteeper tarifftariffcutscuts forfor countriescountries withwith higherhigher industrialindustrial tariffs,tariffs, namely,namely,thethe developingdeveloping countriescountries..



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EverEver--Shrinking Policy Space : FTAs/BITsShrinking Policy Space : FTAs/BITs

AndAnd itit isis notnot justjust thethe WTOWTO thatthat restrictsrestricts developingdevelopingcountriescountries policypolicy spacespace inin tradetrade andand industrialindustrial policiespolicies..

TheThe developeddeveloped countries,countries, especiallyespecially thethe US,US, havehaveusedused bilateralbilateral andand regionalregional freefree tradetrade agreementsagreements(FTAs)(FTAs) andand bilateralbilateral investmentinvestment agreementsagreements (BITs)(BITs) totoimposeimpose onon developingdeveloping countriescountries restrictionsrestrictions thatthat theythey

cannotcannot getget acceptedaccepted inin thethe WTOWTO..



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EverEver--Shrinking Policy SpaceShrinking Policy Space

And And itit isis notnot unknownunknown thatthat conditionsconditions thatthat havehave

nothingnothing toto dodo withwith tradetrade policiespolicies areare imposedimposed ininsomesome ofof thethe FTAsFTAs.. ForFor example,example, whenwhen itit signedsigned thethebilateralbilateral FTAFTA withwith thethe US,US, ChileChile waswas requiredrequired totocommitcommit itselfitself notnot toto useuse anyany capitalcapital controlcontrol inin thethefuturefuture..



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EverEver--Shrinking Policy Space : FDIShrinking Policy Space : FDI

InIn additionaddition toto thesethese (aid(aid andand loan)loan) conditionalitiesconditionalities

andand newnew internationalinternational tradingtrading rules,rules, thethe policypolicyspacespace ofof thethe developingdeveloping countriescountries isis furtherfurtherlimitedlimited byby thethe (real(real andand imagined)imagined) threatthreat ofofcapitalcapital flightflight inin thethe environmentenvironment ofof openopen capitalcapitalmarketsmarkets..

Shrinking Policy Space: ReferenceShrinking Policy Space: Reference

to Trade & Industrial Policyto Trade & Industrial Policy


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EverEver--Shrinking Policy Space : FDIShrinking Policy Space : FDI

FearingFearing thethe punishment punishment byby thethe foreignforeigninvestorinvestor (as(as ifif allall foreignforeign investorsinvestors shareshare thethe

samesame interestsinterests andand wantwant thethe samesame things),things),developingdeveloping countrycountry governmentsgovernments adoptadopt policiespoliciesthatthat theythey thinkthink (or(or thatthat theythey areare toldtold will)will) pleasepleasethethe foreignforeign investorinvestor especiallyespecially inin termsterms ofofmacroeconomicmacroeconomic policy,policy, corporatecorporate taxation,taxation,labourlabour law,law, andand environmentalenvironmental regulationregulation..



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EverEver--Shrinking Policy Space : OthersShrinking Policy Space : Others

AndAnd therethere areare thethe internationalinternational media,media, thethe creditcredit

ratingrating agencies,agencies, consultingconsulting firms,firms, andand variousvariousinternationalinternational organizations,organizations, whowho regularlyregularly publishpublishmaterialsmaterials thatthat praisepraise countriescountries doingdoing thethe rightrightthingthing andand robbishrobbish thosethose whowho dont,dont, althoughalthough theytheywillwill dodo aa UU--turnturn whenwhen itit suitssuits themthem..



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EverEver--Shrinking Policy Space : Domestic PressureShrinking Policy Space : Domestic PressureGroupsGroups

AtAt thisthis point,point, itit isis importantimportant toto notenote thatthat policypolicyspacespace isis alsoalso constrainedconstrained byby domesticdomestic interestinterestgroupsgroups inin thethe developingdeveloping countriescountries themselvesthemselves..ThereThere areare thosethose citizenscitizens ofof developingdeveloping countriescountrieswhosewhose interestsinterests lielie inin restrictingrestricting theirtheir ownown

governmentsgovernments policypolicy spacespace..




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FinanciersFinanciers maymay wantwant theirtheir governmentgovernment toto bebe lockedlockedintointo prudent prudent macroeconomicmacroeconomic policiespolicies throughthroughinstitutionsinstitutions likelike centralcentral bankbank independence,independence,currencycurrency board,board, autonomousautonomous revenuerevenue agency,agency,deficitdeficit rulesrules andand inflationinflation targetingtargeting..



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SomeSome ofof themthem maymay wantwant theirtheir governmentsgovernments

freedomfreedom toto controlcontrol crosscross--borderborder capitalcapital movementsmovementscurtailedcurtailed oror hopefullyhopefully totallytotally takentaken away,away, soso thatthattheythey cancan taketake thethe moneymoney outout ofof thethe countrycountry ifif andandwhenwhen necessarynecessary..

ExportersExporters ofof agriculturalagricultural productsproducts maymay wantwant totokeepkeep theirtheir governmentgovernment onon thethe narrownarrow andand straightstraightpathpath ofof freefree tradetrade throughthrough thethe WTO,WTO, bilateralbilateral andandregionalregional FTAs,FTAs, andand thethe restraintsrestraints byby thethe WorldWorld BankBankandand otherother internationalinternational organizationsorganizations..




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And And therethere areare alsoalso thosethose whowho wantwant theirtheir ownowngovernmentsgovernments policypolicy spacespace toto bebe restrictedrestricted forforideologicalideological reasonsreasons.. TheseThese daysdays manymany economistseconomistsinin developingdeveloping countriescountries areare ideologicallyideologically committedcommittedtoto thethe freefree marketmarket andand wantwant thethe policypolicy spacespace ofoftheirtheir governmentsgovernments toto bebe restrictedrestricted lestlest thatthat theirtheirpoliciespolicies deviatedeviate fromfrom (what(what theythey thinkthink are)are) whatwhatthethe sciencescience ofof economiceconomic sayssays..



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A Critical Look at Some Key PrinciplesA Critical Look at Some Key Principles

TheThe LevelLevel PlayingPlaying FieldField

-- InIn thethe pushpush forfor thethe reductionreduction inin policypolicy spacespace forfor

developingdeveloping countries,countries, thethe rhetoricrhetoric ofof aa levellevel playingplayingfieldfield isis usuallyusually deployeddeployed asas thethe mostmost importantimportantprincipleprinciple thatthat justifies justifies aa drasticdrastic shrinkageshrinkage inin thatthatspacespace.. TheThe developingdeveloping countriescountries shouldshould levellevel thetheplayingplaying field,field, itit isis argued,argued, byby removingremoving thethe unfairunfair

advantagesadvantages thatthat theythey areare currentlycurrently enjoyingenjoying inin theirtheircompetitioncompetition withwith thethe developeddeveloped countries,countries, suchsuch asashigherhigher tariffs,tariffs, weakerweaker protectionprotection ofof intellectualintellectualpropertyproperty rights,rights, andand moremore stringentstringent restrictionsrestrictions ononforeignforeign investmentinvestment..



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TheThe LevelLevel PlayingPlaying FieldField

-- NeedlessNeedless toto say,say, levellevel playingplaying fieldfield isis thethe rightright

principleprinciple toto adoptadopt whenwhen thethe playersplayers areare equalequal..However,However, whenwhen thethe playersplayers areare unequal,unequal, itit isis thethewrongwrong principleprinciple toto applyapply..



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Special Special andand DifferentialDifferential TreatmentTreatment andand LessLess thanthanFullFull ReciprocityReciprocity

--

WeWe shouldshould notnot callcall thethe higherhigher tariffstariffs andand otherothermeansmeans ofof protectionprotection moremore extensivelyextensively (but(but notnotexclusively)exclusively) usedused byby thethe developingdeveloping countriescountriesspecial special treatmenttreatment theythey areare just just differentialdifferentialtreatmenttreatment forfor countriescountries withwith differentialdifferential capabilitiescapabilities

andand goalsgoals..



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LTFRLTFR

-- WhenWhen thethe tarifftariff cutscuts askedasked fromfrom thethe developingdeveloping

countriescountries areare muchmuch largerlarger inin theirtheir impactimpact duedue tototheirtheir greatergreater absoluteabsolute magnitudemagnitude and,and, moremoreimportantly,importantly, toto theirtheir weakerweaker adjustmentadjustment capabilitiescapabilitiesandand theirtheir greatergreater needsneeds toto useuse thethe tariffstariffs-- itit isiswrongwrong toto saysay thatthat thesethese countriescountries areare beingbeing LTFR,LTFR,

eveneven ifif theythey areare makingmaking lessless cutscuts inin proportionalproportionaltermsterms thanthan areare thethe developeddeveloped countriescountries (although(althougheveneven thisthis isis notnot necessarilynecessarily thethe case)case)..



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TheThe OneOne--WayWay--StreetStreet ViewView ofof FlexibilityFlexibility

-- TheThe developeddeveloped countriescountries havehave triedtried toto sellsell certaincertain

agreementsagreements inin thethe WTOWTO toto thethe developingdeveloping countriescountriesonon thethe groundground thatthat theythey givengiven enoughenough flexibilityflexibility totothethe latterlatter countriescountries--mainlymainly inin thethe formform ofof keepingkeepingsomesome sectorssectors offoff thethe agreementsagreements.. SoSo GATSGATS isis saidsaidtoto bebe flexibleflexible becausebecause itit allowsallows countriescountries toto keepkeepsomesome sectorssectors offoff theirtheir marketmarket--openingopeningcommitmentscommitments..



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-- However,However, thisthis isis aa veryvery peculiarpeculiar notionnotion ofof flexibilityflexibility..For,For, onceonce aa sectorsector isis liberalized,liberalized, therethere isis nono goinggoingbackback.. Indeed,Indeed, thethe wholewhole ideaidea ofof tarifftariff bindingbinding inin thetheWTOWTO isis basedbased onon thisthis notionnotion..



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-- IfIf therethere isis goinggoing toto bebe genuinegenuine flexibility,flexibility, countriescountries

shouldshould bebe allowedallowed toto unbindunbind andand raiseraise theirtheir tariffs,tariffs,ifif therethere isis aa reasonablereasonable groundground forfor itit.. ForFor example,example,ifif aa countrycountry genuinelygenuinely underestimatedunderestimated thetheadjustmentadjustment costscosts whenwhen itit mademade aa decisiondecision toto cutcutthethe tariffstariffs inin particularparticular industriesindustries asas waswas inin factfact

thethe casecase withwith manymany developingdeveloping countriescountries inin thetheUruguayUruguay RoundRound itit maymay bebe reasonablereasonable toto allowallowthatthat countrycountry toto raiseraise tarifftariff ceilingsceilings inin thosethoseindustriesindustries.. ForFor anotheranother example,example, aa countrycountry maymayhavehave setset lowlow tarifftariff ceilingsceilings inin thosethose industriesindustries..



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-- ForFor anotheranother example,example, aa countrycountry maymay havehave setset lowlow

tarifftariff ceilingsceilings inin thosethose industriesindustries becausebecause ititunderestimatedunderestimated thethe capabilitiescapabilities ofof domesticdomesticproducersproducers andand diddid notnot thinkthink anyany infantinfant industryindustryprotectionprotection wouldwould everever becomebecome necessarynecessary inin thosethose

industriesindustries.. However,However, itit shouldshould bebe allowedallowed toto raiseraisetarifftariff ceilingsceilings ifif itit laterlater findsfinds thatthat afterafter allall therethere isissomesome hopehope ofof viableviable domesticdomestic producersproducers emergingemergingwithwith strongerstronger tarifftariff protectionsprotections inin thosethose industriesindustries..



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NationalNational AutonomyAutonomy:: TheThe RightRight toto bebe WrongWrong

-- ManyMany freefree tradetrade economistseconomists likelike toto presentpresent

themselvesthemselves asas defendersdefenders ofof thethe interestsinterests ofof thethedevelopingdeveloping countriescountries.. TheThe WorldWorld Bank,Bank, forfor example,example,inin itsits famousfamous EastEast AsianAsian MiracleMiracle report,report, warnedwarned thatthatotherother developingdeveloping countriescountries shouldshould notnot trytry totoemulateemulate thethe interventionistinterventionist tradetrade andand industrialindustrial

policiespolicies ofof EastEast Asia,Asia, becausebecause theythey dodo notnot havehave thetheadministrativeadministrative capabilitiescapabilities toto makemake thesethese complexcomplexpoliciespolicies workwork (World(World BankBank 19931993)).. InIn doingdoing so,so, thetheBankBank wantswants toto bebe seenseen asas protectingprotecting thethe developingdevelopingcountriescountries fromfrom harmingharming themselvesthemselves byby employmentemploymentpoliciespolicies thatthat havehave littlelittle chancechance ofof successsuccess..



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-- SomeSome wouldwould gogo eveneven furtherfurther.. TheyThey wouldwould quitequiteexplicitlyexplicitly pitchpitch themselvesthemselves againstagainst thethe ignorantignorant andandoftenoften corruptcorrupt developingdeveloping--countrycountry governmentsgovernmentsbeholdenbeholden toto interestinterest groups,groups, inin defencedefence ofof thethecommoncommon men,men, whowho wouldwould benefitbenefit fromfrom freefree tradetrade..



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The The leadersleaders ofof thethe developingdeveloping nationsnations rulerule

countriescountries thatthat are,are, onon averaged,averaged, poorpoor oror veryvery poor,poor,itit doesdoes notnot followfollow thatthat thesethese leadersleaders necessarilynecessarilyspeakspeak onon behalfbehalf ofof thethe poorpoor andand poorestpoorest inin theirtheircountriescountries.. SomeSome dodo;; othersothers representrepresent corruptcorrupt andandrepressiverepressive eliteselites thatthat feedfeed offoff thethe rentsrents createdcreated bybyimposingimposing barriersbarriers toto tradetrade andand otherother distortions,distortions, atatthethe expenseexpense ofof theirtheir poorestpoorest andand mostmost defenselessdefenselesscitizenscitizens (Buiter,(Buiter, ChiefChiefEconomist,Economist, EBR&D)EBR&D)..



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-- ThusThus seen,seen, whicheverwhichever variantvariant ofof thethe freefree tradetrade viewview

oneone takes,takes, thethe shrinkingshrinking ofof policypolicy spacespace forfordevelopingdeveloping countrycountry governmentsgovernments inin thethe areaarea ofoftradetrade andand industrialindustrial policiespolicies isis aa goodgood thing,thing, asas ititpreventsprevents thethe developingdeveloping countriescountries fromfrom makingmakingcostlycostly policypolicy mistakes,mistakes, whetherwhether outout ofof misguidedmisguidedbeliefbelief inin interventionisminterventionism (the(the WorldWorld BankBank version)version)oror duedue toto interestinterest groupgroup politicspolitics (the(the BuiterBuiterversion)version)..



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Shrinking Policy Space 21.04

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