Policies Towards Market Disturbance

Abstract

The recent revival of protectionism in developed countries seems to be mainly concerned with safeguarding industries against market disturbances of various kinds. This has led to policies or devices which are essentially conservationist in their objective. The purpose of this chapter is to examine in rather general terms some of the basic principles concerning such policies towards market disturbances.

I am particularly indebted to Carl Hamilton and Gary Sampson for comments and discussion. I owe to Gary Sampson the suggestion that I tackle the issues considered here, with the particular aim of illuminating aspects of the Multifibre Arrangement and the logic of safeguard measures. Readers familiar with my own work should note that most of the ideas of the first four sections (and especially the concept of the ‘conservative social welfare function’) can be found in Corden (1974). Some of the ideas of the last section are developed in more detail in Corden (1980). The present chapter is related to, and overlaps with, a much longer paper prepared in 1983 for UNCTAD.