The topic of aid-for-trade, listed in the Hong Kong WTO Ministerial Conference at February of 2006, becomes another important subject in the Trade and Development. It is in extensive range, but not an all-brand-new concept. This paper will not address all aid-for-trade plans, and will be only aimed at the supply problem of public goods reducing trade cost.
This paper mainly adopts Ricardo¡¦s model, and plans to carry out the analysis of models in three stages. In the first stage, there are only one donor and one receiver. Given the existence of trading cost, we analyze how the donor voluntarily offer the aid-for-trade and its effect on welfare. In the second stage, the model is extended to a three-country case: one receiver and two donors. It is found that the supply of aid-for-trade is below the socially optimal level.. In the last stage, the model is further extended to a four-country case: two donors and two receivers. However, to the aid-for-trade is distributed by an international organization rather by the donors directly. Hence, we will discuss whether the involvement of the international organization contributes to solving the problem of insufficient suply of public goods. Inferring a conclusion from the models mentioned above, we know that¡G
(1) In the bilateral trade model, the donor would voluntarily offer aid-for-trade at the socially optimal level.
(2) In the three-country model,, the aid aimed at reducing the trade cost will benefit all trading partners and aid-for-trade becomes a public goods no matter whether the dornors are endowed with the same amount of factors or not.Given that both donors offer aid-for-trade simultaneously, the amount of aid-for-trade offered is proportional to the amount of factor endowed. As long as aid-for-trade becomes a public goods, the free-riding behavior will prevent the supply of aid-for-trade from the efficient level.
(3) In the four-country mode, we discuss two aid-distributing mechanisms and draw the conclusion: if the international organization gets involved, and the donors consult the offer of aid-for-trade with each other and assign the burden in accordance with the proportion of factor endowment, the problem of insufficient supply of aid-for-trade will be solved.
| Identifer | oai:union.ndltd.org:NSYSU/oai:NSYSU:etd-0716108-174602 |
| Date | 16 July 2008 |
| Creators | Hsieh, Feng-yi |
| Publisher | NSYSU |
| Source Sets | NSYSU Electronic Thesis and Dissertation Archive |
| Language | Cholon |
| Detected Language | English |
| Type | text |
| Format | application/pdf |
| Source | http://etd.lib.nsysu.edu.tw/ETD-db/ETD-search/view_etd?URN=etd-0716108-174602 |
| Rights | campus_withheld, Copyright information available at source archive |
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