, 4 tweets, 1 min read Read on Twitter
There are good economic and political reasons why the compensation part of the liberalization-cum-compensation bargain was not fulfilled (and could not have been). See argument here drodrik.scholar.harvard.edu/files/dani-rod…. +
But in brief: First, when trade barriers are very low reducing them does not generate enough resources to redistribute under reasonable assumptions about the deadweight loss of taxes and transfers. +
Second, political time inconsistency undercuts any promise to liberalize now and redistribute later, when trade agreements are costly to undo. (So redistribution happens only when it is baked into the social welfare system, as in Europe, not when it is an add-one as in the US). +
Finally, trade agreements today are mostly about things like pharma and investment rules, with no presumption of positive net gains from trade to be redistributed for compensation. In sum in today's world the liberalization-cum-compensation bargain lacks economic/political basis.
Missing some Tweet in this thread?
You can try to force a refresh.

Like this thread? Get email updates or save it to PDF!

Subscribe to Dani Rodrik
Profile picture

Get real-time email alerts when new unrolls are available from this author!

This content may be removed anytime!

Twitter may remove this content at anytime, convert it as a PDF, save and print for later use!

Try unrolling a thread yourself!

how to unroll video

1) Follow Thread Reader App on Twitter so you can easily mention us!

2) Go to a Twitter thread (series of Tweets by the same owner) and mention us with a keyword "unroll" @threadreaderapp unroll

You can practice here first or read more on our help page!

Follow Us on Twitter!

Did Thread Reader help you today?

Support us! We are indie developers!


This site is made by just three indie developers on a laptop doing marketing, support and development! Read more about the story.

Become a Premium Member ($3.00/month or $30.00/year) and get exclusive features!

Become Premium

Too expensive? Make a small donation by buying us coffee ($5) or help with server cost ($10)

Donate via Paypal Become our Patreon

Thank you for your support!