Governments Favor Protectionism Over Free Trade, Hurting Consumers and Economies
The article examines why small economies often have trade policies that favor protecting local industries over promoting free trade. The researchers explore how government goals related to inequality and political support can lead to trade policies that restrict trade instead of promoting it, even between large countries that have trade agreements. They show that concerns about inequality and maintaining political support can result in anti-trade bias in trade policies, regardless of whether resources are specific to certain industries or can move between sectors.