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RESEARCH PRODUCT

External effects of domestic regulations: comparing internal and international barriers to trade

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Abstract In a world in which barriers to trade at all levels—international and internal—are mostly a by-product of the implementation by governments of different regulatory policies to deal with “domestic” or “local” problems such as environmental degradation, health, and labor standards, the article purports to show how the mechanisms that are set in motion by the operation of competition among the governments inhabiting the different jurisdictional tiers of federal countries lead to outcomes that are different from those generated by the ‘agreed-upon’ rules that govern the relations of national governments with each other in matters of international trade.