Policy Mechanisms for Trade Reform in a Democracy Essay
The article “Escaping a Protectionist Rut: Policy Mechanisms for Trade Reform in a Democracy” by Blanchard and Willmann published in Journal of International Economics in March 2011 offers a two period overlapping generations (OLG) model for discussing the mechanisms of trade liberalization and the main influential factors affecting them.
The authors distinguish between the two main mechanisms of trade policy reforms, including those of protectionist and liberalization strategies which can be chosen by decision makers, depending upon the levels of their awareness and skills.
By using a historical perspective, Blanchard and Willmann provide the historical examples of protectionist and liberalization mechanisms which were used by different countries, analyzing the consequences of these decisions and making reasonable conclusions concerning the effectiveness of each of them.
For example, Jefferson’s Trade Embargo of 1807 is mentioned as an example of a protectionist legislation mechanism used for restricting the trade. Taking into account the fact that this experiment failed and became one of important predictors of war between the United States and Britain, this historical example demonstrate the ineffectiveness of the protectionist route as compared to the strategy of liberalization of trade.
The article under analysis can be related to the class material because it applies a theoretical framework to the historical analysis of the Embargo Act of 1807, explaining the main causes of its failure and role in establishing protectionist constituency in the country. This generalization-based approach is valuable for understanding the main factors affecting the choice of the mechanisms of the trade reform in comparison to other examples from the world and national history.
Additionally, applying the conclusions of the historical and theoretical overviews to the modern context, the authors shed light upon the historical lessons which should be learnt from Jefferson’s Embargo Act of 1807 and other examples for avoiding similar mistakes in the future.
Blanchard, Emily and Gerald Willmann. “Escaping a Protectionist Rut: Policy Mechanisms for Trade Reform in a Democracy.” Journal of International Economics 85.1 (2011): 72-85. Web.
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