Politicized Trade: What Drives Withdrawal of Trade Preferences?

ABSTRACT

While it is well understood that industrialized countries use aid to grant political favors, little research covers alternative channels such as trade policy towards developing countries. We analyze eligibility investigations and revoking of U.S. Generalized

System of Preferences (GSP) benefits to see whether political friends of the U.S. receive favorable treatment. While countries politically aligned with the U.S. are equally likely to be investigated, they are significantly less likely to have their benefits suspended.

The paper was published in the International Journal Economics Letters.

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