Have Long-Established Patterns of Protectionism Changed During this Crisis? A Sectoral Perspective

Vinod K. Aggarwal and Simon J. Evenett

Broken Promises, 2008

During the current sharp global economic downturn much has been made of the scale of government policy responses, whether it be monetary policy (e.g. “quantitative easing”), fiscal policy (e.g. “stimulus packages”) or other forms of state intervention (including “bailouts”). Indeed it is often remarked that the reason the contemporary crisis has not descended into another Great Depression is precisely because of the scale of some government intervention. This observation, however, need not be as benign as it seems; after all, governments may find themselves under pressure to act from influential sectoral groups, such as company shareholders, employers, trade unions, and the environmental lobby. Moreover, once a government demonstrates its willingness to engage in far-reaching intervention on behalf of one interest it may find itself confronted for requests from others.

Using information from the Global Trade Alert database, the first objective of this chapter is to examine the cross-sectoral pattern of trade-related state intervention that has been imposed since the first crisis-related G20 summit in November 2008. It will be interesting to see if the current pattern differs from that observed before the crisis. A second goal is to begin exploring (no claims are made to conclusive demonstration) the relative importance of competing explanations for the contemporary pattern of crisis-era protectionism.

View More

Interested in donating to BASC?

Donate Now