Paper on Domestic Political Institutions

Write a 5 pages paper on domestic political institutions. Domestic politics are primary over economics. It involves pursuing state interests by influencing what is happening in the market. it is impor

Write a 5 pages paper on domestic political institutions. Domestic politics are primary over economics. It involves pursuing state interests by influencing what is happening in the market. it is important to understand the linkage between domestic political institutions’ changes in trade policies because this helps in determining the dynamic movements of supply and demand of trade policies. Some of the trade policies that are used to promote or restrict free trade include import tariffs, export taxes, subsidies, licensing, and quotas (Frieden et al 2010, p.45). Generally, politics play a crucial role in influencing trade policies and tariffs because political factors affect economic practices. Domestic politics influence these outcomes by restricting or increasing free trade. For example, certain types of tariffs imposed by the domestic political class limit imports of essential raw materials as suggested by the mercantilist theoretical approach. Exports of raw materials and technology may also be discouraged through domestic politics seeking which may include various trade policies and tariffs.

Industrial nations pursue protectionist policies to safeguard their infant industries. However, when the industry is strong enough, domestic political institutions try to pursue free trade in order to encourage international business relations for economic interdependence and growth. Domestic political institutions also limit the range of goods that need protectionism and the size of tariff applied. However, protectionism needs to be temporary. According to mercantilists, trade policies can be developed to create a competitive advantage (Cohen & Lipson 1999, p.67). Domestic political institutions influence such outcomes by encouraging tariffs that will increase revenues for their political and economic interests. Engaging in trade policies and tariffs therefore increase the survival of domestic political institutions.

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According to Jo (2006, p.97), trade policies enhance distributional benefits for domestic political institutions and groups. The decisions of a state to enter free trade will therefore depend on the distributional consequences of trade policies.&nbsp.&nbsp.

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