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Second-best argument for protection |
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Second-best argument for protection1. Any argument for protection that can be countered by pointing to a different and less distortionary policy that would achieve the same desired result at lower economic cost. 2. An argument for protection to partially correct an existing distortion in the economy when the first-best policy for that purpose is not available. For example, if domestic production generates a positive externality and a production subsidy to internalize it is not available, then a tariff may be second-best optimal.Similar MatchesTariff protectionTariff protectionProtection provided by a tariff. Infant industry protectionInfant industry protectionProtection of a newly established domestic industry that is less productive than foreign producers. If productivity will rise with experience enough to pass Mill's and Bastable's tests, there is a second-best argument for protection. The term is very old, but a classic treatment may be found in Baldwin (1969). ProtectionismProtectionismAdvocacy of protection. The word has a negative connotation, and few advocates of protection in particular situations will acknowledge being protectionists. Content protectionContent protectionSee domestic content protection. Environmental protection argument for a trade interventionEnvironmental protection argument for a trade interventionThe view that trade should be restricted in order to help the environment. Examples include embargos on imports made from endangered species, limits on imports produced by methods harmful to the atmosphere, and restrictions on investment into locations with lax environmental standards. This is usually a second-best argument. Further SuggestionsDeposit Protection SchemeConsumer Credit Protection Act of 1968 Import protection Domestic content protection Investor Protection Scheme Securities Investor Protection Corporation Labor standards argument for protection National defense argument for protection Balance of payments argument for protection Effective rate of protection Endogenous protection protection applied Labor standards argument for protection Effective protection Cultural argument for protection Noneconomic objectives argument for protection Employment argument for protection Protectionism Nominal rate of protection Contingent protection Foreign investment argument for protection Mortgage payment protection insurance (MPPI) Payment protection insurance Patriotism argument for protection Marine Mammal Protection Act |
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