How Much Does Violence Tax Trade?
AbstractWe investigate the empirical effect of violence, as compared to other trade impediments, on trade flows. Our analysis is based on a panel data set with annual observations on 177 countries from 1968 to 1999, which brings together information from the Rose data set, the iterate data set for terrorist events, and data sets of external and internal conflict. We explore these data with traditional and theoretical gravity models. We calculate that, for a given country year, the presence of terrorism together with internal and external conflict is equivalent to as much as a 30% tariff on trade. This is larger than estimated tariff-equivalent costs of border and language barriers and tariff-equivalent reduction through generalized systems of preference and WTO participation. Copyright by the President and Fellows of Harvard College and the Massachusetts Institute of Technology.
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Bibliographic InfoArticle provided by MIT Press in its journal The Review of Economics and Statistics.
Volume (Year): 88 (2006)
Issue (Month): 4 (November)
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Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:
- Conflicts and Economic Development
by Dany Jaimovich - Bakary Baludin in Development Therapy on 2013-03-04 14:32:00
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