New PDF release: Deregulation and Interdependence in the Asia-Pacific Region

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Additional info for Deregulation and Interdependence in the Asia-Pacific Region (National Bureau of Economic Research-East Asia Seminar on Economics)

Example text

For example, relaxation of regulation in railroads and telecommunications in the United States saved consumers over $2 billion annually (Winston 1993). International comparisons find that productivity in the utility sector is substantially higher in countries with more liberal policies (Baily 1993). In partic9. S. cities that have competing utilities, and Bernstein (1988), which finds no significant scale economies in telephone service. See also the references in these papers. 30 Roger G. No11 ular, when combined with policies to facilitate transactions among retail electric utilities, free entry and almost complete deregulation in electrical generation is feasible and offers considerable cost savings.

Whereas retail shop laws have had international ramifications, such as indirectly preventing successful retail chains from entering some countries, the international implications of restricting electronic commerce are surely more important. Both large department stores and discount retailers still must be physically accessible to their customers, so to the extent that there is an international ramification, it pertains to physical investment by a foreign retail chain. For electronic commerce, physical propinquity is unnecessary; a foreign retailer need not invest-or even set foot-in a country to be successful in selling goods.

Line 13 depicts the outcome if countries B and C form a customs union least damage, which often is in a developing country that places a higher value on economic development and income growth than on environmental quality. The point made by Summers and the political response to it provide extremely useful insights into why regulatory policy has become an important component of international trade negotiations. 22 Roger G. Noll in which they each impose a tariff of 10 on each other but maintain a tariff of 25 against country A, which A reciprocates.

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