domino effect

Quick Reference

The tendency of one country's accession to an organization, or adoption of a policy, to induce other countries to follow suit. In the case of joining trade blocs, this could be because the bloc benefits members at the expense of outsiders. In the case of policies, if one country gives tax concessions or subsidies to attract foreign investment, this may divert it from other countries, which induces them to offer similar concessions.

Subjects: Economics.

Reference entries