Figure 3
The flowchart is titled “Trade Policy Approach.” From the title, two branches emerge: The left branch is labeled “Economic Self-Interested Approach,” and the right branch is labeled “Social Concern Approach.” Below the left side, the following text appears in separate lines: “Trade policy depends on increasing or decreasing the person’s real income.” “Labour intensive market prefers import duty.” “Capitalists prefer free trade.” “Majority voting rule (Protection would seem to be outcome.” “If there are more workers than capitalists).” “To develop any social or economic group by the government’s desire to promote national and international goals.” A downward arrow from “Social Concern Approach” points to the above sentence. All these points are grouped by a left curly bracket shown on the left. On the next line, the text reads: “Voting behaviour is influenced by social welfare function.” “Conservative Social Welfare Function.” “Pareto Optimality is emphasized.” Below this, a rectangular box contains the following text: “Redistribution cost plus consumption to workers.” “Voting cost.” “Free rider problem associated with public good.” “Differences in market structure.” A curvy downward arrow from the sentence “If there are more workers than capitalists)” points to the first box. To the right of this box, another box, arranged horizontally, contains the text: “To protect industries seriously injured.” A left-pointing arrow leads from the second box to the first box. A left-pointing downward diagonal arrow is present near the right box. The section between the text “To develop any social or economic group by the government’s desire to promote national and international goals” and the two boxes is grouped by a right curly bracket shown on the right. A downward arrow from the first box leads to an oval labeled “Protectionism.” At the bottom of the flowchart, the following text appears inside a rounded rectangular box: “Capitalists prefer free trade. Tariff increases the wages allocation and optimal allocation of labour. No income redistribution would influence not to reduce price and uncertainties. From foreign policy concern countries allow tariff reductions and free trade. Security issues influenced also in free trade with selected countries.”Approaches in trade policy. Source: The author prepared the framework from Baldwin (1989)