The Political Economy of International Regulatory Cooperation
AbstractWe examine international regulatory agreements that are negotiated under lobbying pressures from producer groups. The way in which lobbying influences the cooperative setting of regulatory policies, as well as the welfare impacts of international agreements, depend crucially on whether the interests of producers in different countries are aligned or in conflict. The former situation tends to occur for product standards, while the latter tends to occur for process standards. We find that, if producer lobbies are strong enough, agreements on product standards lead to excessive deregulation and decrease welfare, while agreements on process standards tighten regulations and enhance welfare.
CitationMaggi, Giovanni, and Ralph Ossa. 2023. "The Political Economy of International Regulatory Cooperation." American Economic Review, 113 (8): 2168-2200. DOI: 10.1257/aer.20200780
- F13 Trade Policy; International Trade Organizations
- F14 Empirical Studies of Trade
- F15 Economic Integration
- L15 Information and Product Quality; Standardization and Compatibility
- L51 Economics of Regulation