Is it wrong for me to delight in the news that the Premier of Quebec, Jean Charest, is embracing protectionism by trying to pass a special law that will hand over a lucrative subway train contract to a local company? Maybe. You see, I forgot to include protectionism/free trade as one of the classic examples of the prisoner's dilemma when I discussed it for my big Intro to IR class. There is always the temptation to protect one's own market, and this is just fine and dandy if no one else does it. I guess that is Charest's hope. Bombardier, the company that has received heaps of handouts over the years from Quebec and from Canada, has a train that costs about 50% more than the competitor's, so it needs a bit of favoritism.
If I were running Bombardier, I would wonder just a bit what this might mean for future plane/train sales to Europe, as the Spanish company can surely try to get some kind of retaliation against this decision.
What does this mean for Montreal? More delays in getting new trains, more money spent on each one, and less money for other stuff. Oh, and business as usual. Is this an example of the corruption that folks speak of? Perhaps not, but it does corrupt the contracting process by eliminating competition.
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