what specific kinds of domestic institutions leads to protectionism and liberalization?

ENGR.ECONOMIC ANALYSIS
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ISBN:9780190931919
Author:NEWNAN
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what specific kinds of domestic institutions leads to protectionism and liberalization?

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Trade liberalization  has always bene one of the controversial topics and it has been opposite to the protectionism, to impose taxes, penalties and the high fines on the foreign operating organization in the different countries. Protectionism is also one of the ways to safeguard industry, where there are chances of the anti dumping products, that would likely to impacts the industry.

 For example, in the Nepal if there is a newly invested R&D sector in the pharma industry, then the strategy is to focus on the protectionism, as if the industry is not protected, it would lead to the many competitors who would entering in the market and operating at the economies of scale and would lead to production of the pharma's and medicine at the low costs.  If the Nepal pharma industry is not protected by the Nepal government, then being the newly operating pharma industry would be operating at the high economies of scale (more costs and less revenue and output) causing customers to demand the foreign pharma products that is operating at a low economies of scale (low costs and high profits).

 

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