Publication: International Commodity Agreements and Cartels: Lessons and Policy Implications
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Embargoed until 2025-12-13
Embargoed until 2025-12-13
Published
2024-06-13
ISSN
0257-3032 (print)
1564-6971 (online)
1564-6971 (online)
Date
2025-08-08
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Abstract
Throughout the 20th century, countries sought to mitigate the adverse effects of boom-and-bust cycles in commodity prices through international supply management initiatives aimed at maintaining high and/or stable prices. Post-World War I efforts targeted commodities like coffee, copper, wool, and tin, while the Great Depression prompted agreements on tea, natural rubber, sugar, coffee, and copper. Subsequent arrangements in the post-World War II era and the 1970s involved both producers and consumers of tropical commodities and metals. Although some agreements achieved their goals temporarily, all eventually ended or collapsed, often exacerbating price volatility. OPEC stands out for its longevity but faces similar challenges. Historical experiences caution against relying on such agreements, though coordinated action may be justified during periods of significant market stress. These lessons are particularly relevant today as producers of metals and minerals used in renewable technologies may consider forming price-influencing agreements, which, despite potential short-term success, would likely encounter the same issues that undermined earlier efforts.
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“Baffes, John; Nagle, Peter; Streifel, Shane S.. 2024. International Commodity Agreements and Cartels: Lessons and Policy Implications. World Bank Research Observer. © World Bank. http://hdl.handle.net/10986/43569 License: CC BY-NC-ND 3.0 IGO.”
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