Quid Pro Quo – Definition

Cite this article as:"Quid Pro Quo – Definition," in The Business Professor, updated December 20, 2018, last accessed October 20, 2020, https://thebusinessprofessor.com/lesson/quid-pro-quo-defined/.


Quid Pro Quo Definition

Quid pro quo is a latin phrase meaning “something for something.‚ÄĚ Basically, it entails any situation where two parties trade one thing for another. Generally, the exchange takes place at the same time and is for equivalent value.

A Little More on Quid Pro Quo

‚ÄúQuid pro Quo‚ÄĚ describes a traditional contractual relationship where value is exchanged between parties. Value in a contract is known as ‚Äúconsideration‚ÄĚ.

Quid pro Quo often describes an ethically questionable (and sometimes illegal) scenario where one favor is exchanged for a reciprocal favor. Bribes to company or government officials in exchange for other benefits fall into this category.

Quid pro Quo is also used to describe a cause of action for sexual harassment in the workplace. It pertains to a scenario where a manager offers a subordinate employee workplace benefits (higher pay, promotion, time off, better job responsibilities, etc.) in exchange for sexual favors.

References for Quid Pro Quo


Academic Research on Quid Pro Quo

Quid pro quo foreign investment, Bhagwati, J. N., Dinopoulos, E., & Wong, K. Y. (1992). The American Economic Review, 82(2), 186-190.  This paper analyzes a new form of direct foreign investment (DFI) to eliminate the threat of protection by the host country. The decision about the level of investment is made in the first horizon period. The paper further states that when this is combined with the level of exports of the first period, the possibility of a quota on exports being exposed is determined.

Quid pro quo foreign investment and welfare: a political-economy-theoretic model, Bhagwati, J. N., Brecher, R. A., Dinopoulos, E., & Srinivasan, T. N. (1987). Journal of Development Economics, 27(1-2), 127-138. This article analyzes a generic case and then utilizes a simplification that treats the direct foreign investment as integrated with international capital mobility and also works with a model of conventional trade-theory in which perfect competition exists. The main idea that the article focuses on is that the capital inflows from the exporting country will reduce the possibility of protection against the exporting country after some time.

VERs, quid pro quo DFI and VIEs: political-economy-theoretic analyses, Bhagwati, J. N. (1987). International Economic Journal, 1(1), 1-14. This study explores the causes and effects of VERs, the Quid Pro Quo DFI and the VIEs. The Quid Pro Quo DFI is explained as that investment that made at a certain period to control the possibility of protection being invoked in the following period. VIEs are the quantity outcomes in the home markets of the nation they are imposed on.

Tariff Liberalisation and Increased Administrative Protection: Is There a Quid Pro Quo?, Feinberg, R. M., & Reynolds, K. M. (2007). World Economy, 30(6), 948-961. This paper presents a realistic study carried out to determine the role of tariff liberalization on the escalation of anti-dumping. The study utilizes statistical measures to analyze the relationship of tariff concessions in Uruguay Round Trade negotiations and filing anti-dumping petitions. It emphasizes on determining whether multilateral trade reductions have fueled the increase in users of anti-dumping policies.

Quid pro quo? Examining talent management through the lens of psychological contracts, H√∂glund, M. (2012). Personnel Review,¬†41(2), 126-142. This article investigates the direct and indirect relationship between HRM practices and human capital using a talent management structure. It uses past research on the direct impacts of HRM to determine how employees responses to HRM practices arbitrate the HRM’s link with human capital.

Quid Pro Quo: The Challenges of International Strategic Intelligence Cooperation, Clough, C. (2004). International journal of intelligence and counterintelligence, 17(4), 601-613. This paper analyzes the strategic intelligence cooperation from several viewpoints. It explains that analyzed intelligence may be gathered between two or more nations for their benefit on a long-standing relationship or an ad hoc basis. Quid Pro Quo, in intelligence agencies, means the exchange of information or analysis, though rare, for the mutual benefit of those involved.

QUID PRO QUO FOREIGN INVESTMENT*, Dinopoulos, E. (1989). Economics & Politics, 1(2), 145-160. This research investigates the incidence of industry-specific DFI with the purpose of eliminating the threat of future protection by the host country under different imperfectly competitive market frameworks. It deduces that companies in these markets, change the level of trade and DFI as a response to future protection threats.

Investment Decisions and the¬†Quid Pro Quo¬†Myth, Lynd, S. (1978)..¬†Case W. Res. L. Rev.,¬†29, 396. Employees give up the right to strike in exchange of management’s promise to submit their contract grievances to mediation under the doctrine of quid pro quo. Although the employees relinquish the right to strike over all their complaints, the management only mediates the grievances covered by the contract, and thus it retains the right to make investment decisions unilaterally.

Quid pro quo: technology capital transfers for market access in China, Holmes, T. J., McGrattan, E. R., & Prescott, E. C. (2015).¬†The Review of Economic Studies,¬†82(3), 1154-1193. This paper utilizes quid pro quo policy in a multination dynamic general equilibrium model and incorporates evidence from Chinese patents to derive crucial assumptions on the terms of technology transfer deals and evidence on inward FDI on China to determine major model parameters. This model is used to measure the effects of China’s quid pro quo policy and prove that it massively impacts global innovation and welfare.

Beyond¬†quid pro quo: What’s wrong with private gain from public office?, Stark, A. (1997). American Political Science Review,¬†91(1), 108-120. This article examines the conceptual and normative issues that emerge in the debate over if government officials should be allowed to gain from public office personally. This debate has shifted to the middle of public discourse in the United States, and its primary concern is when an official personally profits from an official position it results in the impairment of his/her official performance.

Quid Pro Quo? China’s Investment-for-Resource Swaps in Africa, Chan-Fishel, M., & Lawson, R. (2007).¬†Development,¬†50(3), 63-68. This study examines whether the concerns on China’s use of ‚Äėno strings attached’ policy in investment and aid packages to secure natural resources access in Africa are warranted or just defensive against its rising influence in Africa. It investigates the use of investment-for-resources exchanges in four countries and concludes that the benefits realized cannot be generalized.

Quid pro quo¬†foreign investment and VERs: A Nash bargaining approach, Dinopoulos, E. (1992). Economics & Politics,¬†4(1), 43-60.This paper builds a two-period model of occurring quid pro quo DFI to grow a future voluntary export restraint’s level. It uses Nash bargaining to identify the wage and VER. It also determines condition which leads to quid pro quo DFI and investigates their effects on profits, union utility as well as the welfare.

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