ABSTRACT

Much of international trade theory has been prescriptive, directed at formulating policy proposals to present to policy makers. In the course taken by the modern theory at least up to the mid 1970's and then as subsequently pursued in a substantial part of the literature, free trade has been presented as the recommended trade policy, subject to qualifications deriving from the identification of various 'distortions' which underlie market failures. It has been co mmonplace to use the theoretical demonstration of the possibility of distortions and market failures to propound corrective interventionist policies. The policies are to be carried out by a benevolent

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