ABSTRACT
In the preceding three chapters we have explored in detail the costs and benefits of, respectively, trade restrictions, industrial subsidies and labour policies. One general lesson that stands out is that trade restrictionsparticularly in the forms typical of the New Protectionism-are the most costly and least well targeted instruments with which governments can address legitimate normative concerns that arise from trade-induced dislocations. Understanding why governments have, nevertheless, adopted trade restrictions as instruments of choice is a necessary precondition to proposing reform of substantive policies. It would be futile to make reform proposals that simply assume away the policy making processes that have generated current policies. Thus, before proceeding to the reform agenda we must first identify the dysfunctions or biases in current policy making processes, measured against the economic and ethical perspectives outlined in Chapter 1.
