Consider a model with perfectly competitive markets.
If those who gain by trade liberalization compensated those who are made worse off by it, one country's trade liberalization would be approved with the unanimous vote of the country's citizens.

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BlackTom AI · Accepted Answer

In a setting with perfectly competitive markets, the standard idea is that trade liberalization creates winners and losers across individuals or groups. 
When those who gain can be made to compensate those who lose, and the compensation is sufficient to leave losers no worse off than before, the outcome satisfies the Kaldor-Hicks principle: a potential Pareto improvement. 
If compensation is feasible and complete, every citizen can be made at least as well off as before, with some strictly better off. Under such circumstances, if each citizen votes based on personal welfare, all would vote in favor because no one is made worse off by the reform, or at least everyone is compensated to be indifferent or better off. 
Therefore, the liberalization would be approved by unanimous consent, since the condition for unanimous approval—no one being worse off after the change—can be achieved through compensation. 
One might wonder about practical issues like the feasibility or enforcement of compensation, or strategic voting, but within the theoretical model described, the statement aligns with the logic of compensating losers to obtain a Pareto-improving or at least Pareto-weakening-free outcome.

SIPAIA6400_001-002_2025_3 - Microeconomic Analysis for International and Public Affairs

Consider a model with perfectly competitive markets. If those who gain by trade liberalization compensated those who are made worse off by it, one country's trade liberalization would be approved with the unanimous vote of the country's citizens.

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