Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
962875 | Journal of International Economics | 2006 | 19 Pages |
Abstract
We propose a simple model of trade outside the law preyed on by robbers and possibly protected by private cops. We establish the conditions for trade collapse, secure trade and insecure trade. Endogenous predation and enforcement can explain both puzzling failures of commonly observed state policies against illegal trade and puzzlingly large trade responses to liberalization in licit goods.
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
James E. Anderson, Oriana Bandiera,