Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/39346 
Year of Publication: 
2005
Series/Report no.: 
Center Discussion Paper No. 910
Publisher: 
Yale University, Economic Growth Center, New Haven, CT
Abstract: 
This paper studies the role of transfers among groups within a country as well as among countries in a two level game of international trade negotiations. We show that in order to realize the intended transfer in the presence of asymmetric information on the states of recipients (and donors), a transfer process uses up additional resources. The difficulty of making transfers renders it less likely that a nation would find it individually rational to participate as a member of an international institution. Costly transfers render the internal and international adjustment difficult, and serve as a barrier to trade liberalization. Costly international transfers harden the resistance against trade liberalization in the (potentially) recipient country and soften it in the (potentially) donor country.
Subjects: 
International trade
tariff negotiation
asymmetric information
transfer
WTO
common agency
two-level game
JEL: 
O82
F13
H21
H71
H77
Document Type: 
Working Paper

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