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Common values for the development round

Published online by Cambridge University Press:  22 December 2004

JOSEPH E. STIGLITZ
Affiliation:
Columbia University
ANDREW H. CHARLTON
Affiliation:
Hertford College, Oxford University
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Abstract

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In the traditional theory of international trade, multilateral trade agreements should be easy because self-interested governments unilaterally commit to reduce their own protection and, as a bonus, they reap positive externalities from liberalization by other nations. In practice national governments do not behave as though they are maximizing the welfare of a representative citizen, but instead they respond to pressure from a diverse mix of constituencies and competing special interests. Governments attempt to manage domestic trade-offs within international negotiations, so progress is slow and protection persists. The practical operation of trade negotiations, emblemized by the infamous ‘green rooms’, is characterized by factionalism, horse-trading, and brinkmanship.

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Copyright
2004 Joseph E. Stiglitz and Andrew H. Charlton