Abstract
This chapter discusses the supply and demand for the government-supported export financing. An analysis of the demand and supply of government financing for international trade may also explain why only exports and not imports are supported, and why nearly all of the Bank's lending is provided in the form of long-term direct credits. This chapter presents the analysis of the determinants of the Eximbank's financing programs using the economic theory of regulation introduced by Stigler and extended by Peltzman, Posner, and Stigler as a framework for analyzing the demand and supply for government intervention in the financing of international trade. There is a demand for government-supported export financing for reasons other than the conventional public policy rationales. Furthermore, the supply of this financing is not solely determined by a rational response to capital market imperfections and deficiencies or even to foreign concessionary financing. Instead, that supply is likely to be influenced by the ability of the U. S. exporters to coordinate their efforts to exert political support for government export financing and by the value of that financing to exporters and their employees relative to the costs of coordination.
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