POLI 441 Chapter Notes - Chapter Dani Rodrik: Trilemma, Mass Politics, Straitjacket
2 Oct 2018
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Document Summary
Hindrances to trade: national borders are depressive to commerce even in absence of cultural or linguistic differences, er uncertainty and tariffs and non-tariff barriers. Int. arbitrage in traded commodities tends to be a slow process. Investments are mostly in-home economies, not as int. oriented as should be, capital flows between rich and poor countries considerably lower than expected. Real interest rates not equalized among even the advanced economies with integrated markets. Internet services remain regionally based e. g. amazon uk site. Tariffs and similar protectionist policies reduced but markets still not fully integrated. National borders and thus the segregated markets that legal jurisdictions create present serious transaction costs. Most clear issues is enforcement of contracts, local courts may be unwilling and int. courts unable to enforce reneged contract between residents of two different countries. Creates opportunistic behaviour and creates risk in int. contracts, based on willingness of country to enforce contracts.
