This chapter examines the possibility of a mutually beneficial policy combination of economic aid by a donor country and tariff reducing trade liberalization in the recipient country under imperfect competition. We set up a simple two country Ricardian trading model in which the donor's export good is supplied by a monopoly firm and the recipient country imposes tariff on imports from the donor country. We derive the condition that mutually beneficial policy coordination can be agreed by the two countries.
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Kurata, H., Okawa, M. (2009). Foreign Economic Aid and Trade Liberalization Under Imperfect Competition. In: Kamihigashi, T., Zhao, L. (eds) International Trade and Economic Dynamics. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-540-78676-4_13
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DOI: https://doi.org/10.1007/978-3-540-78676-4_13
Publisher Name: Springer, Berlin, Heidelberg
Print ISBN: 978-3-540-78675-7
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