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Do WTO rules preclude industrial policy? Evidence from the global economic crisis

Published online by Cambridge University Press:  20 January 2017

Vinod K. Aggarwal  and
Simon J. Evenett
Vinod K. Aggarwal
Affiliation:
Berkeley – Political Science, University of California, BASC, 552 Barrows Hall, Berkeley, CA 94720–1970, USA and Global Scholar, Chung-Ang University, Seoul, Korea
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Abstract

The creation of the World Trade Organization (WTO) in 1995 was a landmark in the development of the liberal international economic order. Yet the global economic crisis of 2008 put the spotlight on the longstanding question whether WTO membership limited the policy choices of governments coping with distress. This Special Issue of Business and Politics uses the crisis as a “stress test” for evaluating the prominent thesis that multilateral trade rules presently impose sharp limits on national industrial policies. The evidence from a wide range of sectoral and national contexts suggests that the WTO's ability to constrain member governments’ use of industrial policy is highly exaggerated. As we argue in this introductory essay, and as the studies in this Issue show, assertions of the WTO's strength do not reflect the incomplete and contested nature of its accords and the imperatives of policymaking in an era when many governments simultaneously intervene in national economies.

Type
Research articles
Information
Business and Politics , Volume 16 , Issue 4: Special Issue: Industrial Policy in the Post-Crisis Era: Guest Editor: Vinod K. Aggarwal , December 2014 , pp. 481 - 509
Copyright
Copyright © V.K. Aggarwal 2014 and published under exclusive license to Cambridge University Press 

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