Instruments of Trade and Industrial Policy

Abstract

Like Chapter 3, this is a scene setting chapter. In Chapter 3 we provide an overview of the links between trade policy and economic development, paying particular attention to the influences that have shaped particular strategies. In this chapter we review in a functional manner the economic effects of a range of instruments of trade and industrial policy. It should be emphasised at the outset that the aim is not to provide a ‘ready reckoner’ of analyses of different instruments. In the context of the present volume that would be both over-ambitious and in fact unnecessary. There are many texts devoted entirely to the microeconomics of commercial policy. As we emphasised in the introduction, this is a book devoted to applied aspects of commercial policy analysis and a basic familiarity with the microeconomics of alternative forms of intervention will therefore be assumed. Our intention in this chapter is simply to offer a brief refresher on the material by way of background.