A Note on Trade Liberalization and Common Pool Resources

17 Pages Posted: 9 Aug 2005

See all articles by Erwin H. Bulte

Erwin H. Bulte

Tilburg University - Department of Economics; Wageningen University

Richard Damania

World Bank; University of Adelaide - School of Economics


When countries share access to a common resource stock, optimal management is based on strategic considerations. We develop a general equilibrium model and show that regulatory policies are strategic substitutes under autarky. Trade liberalization not only changes relative prices, but may change the qualitative nature of the game between jurisdictions. In the small country case with exogenous prices, regulatory policies become strategic complements. In the context of a two-country model, policies remain strategic substitutes but the factors that drive policy changes differ from those under autarky and the small country case. The implications for conservation and resource management are discussed.

Suggested Citation

Bulte, Erwin H. and Damania, Richard, A Note on Trade Liberalization and Common Pool Resources. Canadian Journal of Economics, Vol. 38, No. 3, pp. 883-899, August 2005, Available at SSRN: https://ssrn.com/abstract=772993

Erwin H. Bulte (Contact Author)

Tilburg University - Department of Economics ( email )

P.O. Box 90153
Tilburg, 5000 LE
+31 13 466 9111 (Phone)

Wageningen University

Hollandseweg 1
6706 KN

Richard Damania

World Bank ( email )

1818 H Street, N.W.
Washington, DC 20433
United States

University of Adelaide - School of Economics ( email )

Adelaide SA, 5005
+61 8 8303 4933 (Phone)
+61 8 8223 1460 (Fax)

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