Working Paper: CEPR ID: DP1043
Authors: L. Alan Winters
Abstract: This paper discusses the design of appropriate institutions for trade policy-making in Central and Eastern Europe. Drawing on US and EU experience it argues that legislatures should set the broad parameters, leaving commodity-specific detail to the executives. Sectoral Ministries, e.g. of Agriculture, Energy or Industry, should not control trade policy, a task which should fall to a special Ministry with close links to the Treasury and Ministry of Foreign Affairs. It should be clear precisely who is responsible for trade policy and the public should be informed both of their general interest in trade policy and of the costs and benefits of any particular action.
Keywords: trade policy; central and eastern europe; political economy; institutions
JEL Codes: F13; H19; K39
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Legislature's responsibility for trade policy (F13) | Public accountability (H83) |
| Complexity of trade details (F12) | Delegation of specifics to the executive branch (H11) |
| Delegation of specifics to the executive branch (H11) | Mitigation of protectionism risks from legislative processes (F13) |
| Executive's broader constituency (D79) | Favoring more liberal trade policies (F13) |
| Individual legislators (D72) | Succumbing to local protectionist pressures (F69) |
| Presence of a dedicated trade ministry (F19) | Enhanced effectiveness of trade policy (F13) |
| Dedicated trade ministry (F13) | Clarity and accountability in trade policy (F13) |
| Complexity of trade policy (F13) | Necessitates bureaucratic support (D73) |