Ah. Hallett et Cap. Braga, THE NEW REGIONALISM AND THE THREAT OF PROTECTIONISM, Journal of the Japanese and international economies, 8(4), 1994, pp. 388-421
This paper relies on game theory concepts to discuss both the incentiv
es that lead countries to form themselves into trading blocs and what
the relations between these blocs are likely to be. It argues that reg
ional integration arrangements (RIAs) can work better as precommitment
devices to internally cooperative policies than as global rules becau
se they create a denser network or interlinked targets. The losses for
a participant ostracized (or disciplined) from his bloc are therefore
more immediate and tangible. The hope that RIAs can pave the way for
global free trade, however, is unrealistic. As RIAs enlarge they may b
e better off by exerting market power against outsiders rather than fo
llowing a globally cooperative path, Interbloc trade relations will ul
timately depend on how effective special interest groups are in distor
ting bloc-wide trade policies to suit their particular interests. Thes
e results highlight the importance of a multilateral trading system ab
le to inhibit noncooperative behavior among trade blocs. J. Japan Int.
Econ., Dec. 1994, 8(4), pp. 388-421. University of Strathclyde, Glasg
ow, Scotland, and Department of Economics, Princeton University, Princ
eton, New Jersey 08544-1021; International Trade Division, Internation
al Economics Department, World Bank, Washington, DC. (C) 1994 Academic
Press, Inc.