Political Economy of Trade Policy in Latin America

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Feb 2022
Few propositions in economics are as widely accepted as the theory of comparative advantage: If two countries have a comparative advantage in the production of different goods and services, trade can be welfare-enhancing for both. But trade policy has always been controversial in Latin America, as it is not made by academic economists but by politicians who need to gather and maintain the support of constituents who in some cases have much to lose or gain from different trade policies. This book walks the reader through a complex thicket of contending interests and disparate political institutions to analyze why Latin American governments make the trade policies they do. Its chapters show how an array of different governments have attempted to navigate frequently conflicting interests and ideas, and how different institutional arrangements impinge on trade policy design and outcomes. It is to be hoped that the experiences analyzed here can inform the making of future policy and, perhaps, help improve it.