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Abstract

In producer-friendly economies—economies that are ruled by productive agents and have strong property rights institutions—international trade causes an institutional improvement and an aggregate shift of talent towards production, and away from socially wasteful appropriation. However, in predator-friendly economies—economies that are ruled by rent seekers and have weak institutions—international trade leads to an institutional deterioration, and a more unfavorable talent allocation. (JEL D72, F12, K11)

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File URL: http://www.aeaweb.org/articles.php?doi=10.1257/pol.2.4.148
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Bibliographic Info

Article provided by American Economic Association in its journal American Economic Journal: Economic Policy.

Volume (Year): 2 (2010)
Issue (Month): 4 (November)
Pages: 148-72

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Handle: RePEc:aea:aejpol:v:2:y:2010:i:4:p:148-72

Note: DOI: 10.1257/pol.2.4.148
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Related research

Keywords:

Find related papers by JEL classification:

• D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
• F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies
• K11 - Law and Economics - - Basic Areas of Law - - - Property Law

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Cited by:

1. Do, Quy-Toan & Levchenko, Andrei A., 2006. "Trade, inequality, and the political economy of institutions," Policy Research Working Paper Series 3836, The World Bank.
   
   • Do, Quy-Toan & Levchenko, Andrei A., 2009. "Trade, inequality, and the political economy of institutions," Journal of Economic Theory, Elsevier, vol. 144(4), pages 1489-1520, July.
   • Andrei A. Levchenko & Quý Toà n Ðo, 2006. "Trade, Inequality, and the Political Economy of Institutions," IMF Working Papers 06/56, International Monetary Fund.
2. Andrei A. Levchenko, 2011. "International Trade and Institutional Change," NBER Working Papers 17675, National Bureau of Economic Research, Inc.
   
   • Andrei A. Levchenko, 2008. "International Trade and Institutional Change," Working Papers 579, Research Seminar in International Economics, University of Michigan.
3. Mehrdad Vahabi, 2011. "Appropriation, violent enforcement and transaction costs : a critical survey," Post-Print hal-00629109, HAL.
   
   • Mehrdad Vahabi, 2011. "Appropriation, violent enforcement, and transaction costs: a critical survey," Public Choice, Springer, vol. 147(1), pages 227-253, April.
4. Cervellati, Matteo & Naghavi, Alireza & Toubal, Farid, 2013. "Trade Liberalization, Democratization and Technology Adoption," IZA Discussion Papers 7132, Institute for the Study of Labor (IZA).
5. Vincenzo Bove & Leandro Elia & Petros G. Sekeris, 2013. "U.S. Security Strategy and the Gains from Bilateral Trade," Working Papers 1302, University of Namur, Department of Economics.

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