근린궁핍화 정책(Beggar-thy-Neighbor Policy)

or Beggar-thy-Neighbor

Beggar-thy-neighbor is a type of strategy that is designed to enhance the financial stability and prosperity of one nation at the expense of other nations that currently do business with that country. Essentially, this trading strategy will make use of the devaluation of currency as well as changes in import and export policies and other economic measures to move the internal economy of the nation in a desired direction. Depending on the severity of the changes, a beggar-thy-neighbor situation may temporarily alleviate some of the economic issues faced by the nation, but can in the long run create new difficulties as the measures negatively impact the nation’s trading partners.

There are several different strategies that may go into a beggar-thy-neighbor approach. One has to do with engaging in currency devaluation that has a direct impact on the cost of imports and exports. This particular approach will have the effect of making it more expensive to import goods into the nation while at the same time making exports less expensive. The end result involves higher costs for sellers who routinely import goods while also lowering the profit margin for buyers who purchase products that are exported.

A similar strategy that is considered to be a beggar-thy-neighbor activity is appreciating the currency. This will have the opposite effect of a devaluation, and can be helpful when it comes to dealing with inflation within the nation. The appreciation will also have the effect of increasing the cost of buyers in other nations choosing to do business with domestic companies.

Another common example of a beggar-thy-neighbor approach is to change import policies and procedures so they are more prohibitive. This could mean limiting the import of certain goods or services, a move that is usually designed to motivate domestic businesses to purchase those products from other domestic businesses. As a result, trade with other nations is reduced, something that could harm trade relations over the long run.

While various types of beggar-thy-neighbor strategies can often address a core group of economic issues facing a country, and possibly even alleviate those issues for a time, the impact of implementing those approaches on other nations must be assessed. In some cases, the negative impact on other participants in a multi-nation trade agreement could trigger the demise of the arrangement altogether. When this happens, other economic issues will likely arise, with some of those issues being more severe than the issues that were corrected with the beggar-thy-neighbor activities. For this reason, care should be taken when implementing internal policies that also have an effect on international trade agreements, making sure the efforts do not cause damage that is ultimately not in the best interests of the nation.

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Original application [edit]

Adam Smith made reference to the term in claiming that mercantilist economic doctrine taught nations 'that their interest lies in beggaring all their neighbours'.

The term was originally devised to characterise policies of trying to cure domestic depression and unemployment by shifting effective demand away from imports onto domestically produced goods, either through tariffs and quotas on imports, or bycompetitive devaluation. The policy can be associated with mercantilism and neomercantilism and the resultant barriers to pan-national single markets.

According to economist Joan Robinson beggar-thy-neighbour policies were widely adopted by major economies during the Great Depression of the 1930s.^[1]

Alan Deardorff has analysed beggar-thy-neighbour policies as an instance of the prisoner's dilemma known from game theory: each country individually has an incentive to follow such a policy, thereby making everyone (including themselves) worse off.^[2]

An early appearance of the term, which presumably originates from the name of the Beggar-My-Neighbour card game, is seen in the title of a work on economics from the early period of the Great Depression:

• Gower, E.A., Beggar My Neighbour! : The Reply to the Rate Economy Ramp, Assurance Agents' Press, (Manchester), 1932.

Also today it is in widespread use, as seen in such publications as The Economist^[3] and BBC News.^[4]

Extended application [edit]

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"Beggar thy neighbour" strategies of this kind are not limited to countries: overgrazing provides another example, where the pursuit by individuals or groups of their own interests leads to problems. This dynamic has been called the "tragedy of the commons", though it appears as early as the works of Plato and Aristotle.

"Beggar thy neighbour" trade policies can lead to trade wars between countries. These trade wars follow the prisoner's dilemmagame theory analysis developed through Nash equilibrium in which two countries are poised against each other to produce in the market. Production requires export subsidies for the domestic firm to capture the market, effectively deterring the competing entity. Imagine two companies: Boeing and Airbus, one American, one European firm. They can either chose to produce or to not produce. The matrix follows that if both produce both will lose market share (−5,−5) as they compete in the industry. If they both don't produce (0,0) nobody benefits. If one produces whilst the other does not (100,0) the producing company will capture the industry and have 100% share (0,100). Game theory states that the first mover, or the initial firm in the industry, will always win. The competing firm will have no incentive to enter the market once the competitor has the advantage and thus will be deterred. However, with a strategic trade policy of an export subsidy, the matrix changes as the protecting government covers some of the costs. The matrix now changes from (−5,−5) to (−5,20) in favour of the domestic firm with the subsidy. This will see the protected firm "win" in the game and capture more of the market share as the subsidies burden the costs, which would otherwise deter the company. The game does not finish here, as the other company, being usurped on the second move, will then itself become protected through export subsidies, leading to a trade war between countries. Ergo, beggar-thy-neighbour is evident in trade wars as it increases the domestic welfare at the expense of the competing country.

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 Beggar My Neighbour Policy

Definition of Beggar My Neighbour Policy: This is an economic policy that seeks to promote a country's economy at the expense of another country.

An obvious example, is the use of tariff barriers. A country may place tariff on imports to help promote local domestic industry. This may help local unemployment, but,it will be at the expense of the other country's export sector.

Some economists argue that imposing tariff's doesn't help the domestic economy, but, only certain sectors of the economy.

Currency Depreciation

Beggar my neighbour policy could also be used with regard to exchange rates. For example, the US criticised China for having a low exchange rate, which made Chinese goods more competitive. They argued this increased Chinese growth at the expense of a US trade deficit.

Tax Competition and Beggar Thy neighbour.

Countries can cut corporation tax to attract more inward investment. This takes investment away from other countries and can create unwelcome to lower tax rates. More on tax competition

Related

• Currency Wars

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영국의 여류 경제학자 J.V.로빈슨이 명명한 ‘베거 마이 네이버 폴리시(beggar-my-neighbor policy)’의 역어로 ‘베거 마이 네이버(beggar-my-neighbor)’란 상대방의 카드를 전부 빼앗아 온다는 트럼프에서 사용되는 말에서 유래된 것이다.

이것은 특히 세계경제 전체가 침체하여 각국이 불황으로 어려움을 겪을 때 흔히 행하여지는 국제수지 개선책으로, 자국의 수출을 증가하고 수입을 삭감하여 국내의 경기나 고용상태를 개선하게 하는 대신 타국에게는 실업 증가와 경기의 악화를 야기하는 자국본위의 경제정책을 말한다. 이를 위해서는 환율인상 ·임금인하 ·수출보조금지급 등으로 수출을 증진하고 관세율인상 ·할당제 등으로 수입을 삭감 또는 억제하는 구체적인 방법이 시행된다.

그러나 한 나라가 이러한 정책을 채택하면, 다른 나라도 역시 같은 형태의 보복조치를 취하므로 세계무역은 침체하고 국제경제는 더욱 악화된다. 따라서 현재는 가트(GATT)나 국제통화기금(IMF) 등을 통하여 모든 나라가 국제협조의 입장을 취하도록 강조되고 있다.

참조항목

경제정책, 국제수지, 조앤

[출처] 근린궁핍화정책 | 두산백과

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정부가 국내경기를 활성화시키기 위해 시행한 경기부흥정책이 타국의 경기가 후퇴하는 현상을 초래함으로써 역효과를 가져오는 것을 말한다.

예를 들면 정부가 경기를 확대시키기를 위해 통화팽창정책을 펼 경우, 원화환율의 상승은 국내 재화의 대외수출은 촉진시키지만 외국으로부터의 수입을 억제시킴으로써 우리나라의 국제수지를 개선시키는 효과를 가져온다. 그러나 이로 인해 상대 국가의 수출이 감소하게 되며 이는 그 나라의 국민소득을 감소시킴으로써 외국으로부터의 수입을 줄일 수밖에 없는 상황을 만든다. 뿐만 아니라 이와 같은 결과가 환율의 변동에 따라 발생하기 때문에 외국의 입장에서도 자국 통화의 절하를 유도하게 되고 이는 환율인상 경쟁으로 이어지게 된다.