Political Economy Essay Example | Topics and Well Written Essays - 1250 words

Political Economy - Essay ExampleIn 1930 the Smoot-Hawley act was enacted to prevent U.S owners of factors of production from cosmos threatened by the Great economic crisis at the time. The rates were set high to cushion them from incur losses. On the other hand, the trading partners responded promptly by taking similar measures a move which turn the economic condition that was prevailing. The congress was forced to act very fast in order to chink the situation that was deteriorating and consequently the Reciprocal Trade Agreement Act was implemented in 1934.The act gave the death chair the powers allow for tariffs that met the thresholds that had been agreed jointly by the trading partners (Cooper, 2014,pgs 2-3).Political institutions play a major graphic symbol in coming up with pot tariffs and trade policies. Their main purpose is to protect the interests of traders from being ill-used by their trading partners. When they participate in coming up with the tariffs such as h aving bilateral and multilateral agreements, a lot of opportunities are opened up for the citizens of the country and businesses operate in an efficient manner. The decisions make in coming up with these trade tariffs and policies has political consequences for the government in power because producers are more or less likely to support regimes that come up with policies that favor them. On the other hand, producers are likely to oversight regimes that come up with unfavorable policies according to them because they seem to be undermining their operations (World Trade Report, 2007, Pg 55).The Great Depression in the 1930s forced the U.S to review its trade policies and tariffs. The country was forced to bend low the trade barriers so as to forge economic cooperation with other countries. Trade became liberalized although the move was seen to have some political agenda. The U.S congress was adamant to give the president freedom