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Trade, Factor Proportions, and Political Rights

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  • José Tavares

    (Faculdade de Economia, Universidade Nova de Lisboa)

Abstract

This paper uses aggregate data to test the implication that capitalpoor individuals favor trade liberalization in poor (capital-scarce) countries and are against it in rich (labor-scarce) countries. Income per capita is used as a proxy for the country capital-labor ratio while political rights is used as a proxy for the capital-labor ratio of the median voter. We analyze the determinants of average tariff rates in a cross section of countries to find that they are negatively associated with both income per capita and political rights, while they are positively, significantly, and robustly associated with their interaction, corroborating our initial hypothesis. Copyright by the President and Fellows of Harvard College and the Massachusetts Institute of Technology.

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Bibliographic Info

Article provided by MIT Press in its journal The Review of Economics and Statistics.

Volume (Year): 90 (2008)
Issue (Month): 1 (February)
Pages: 163-168

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Handle: RePEc:tpr:restat:v:90:y:2008:i:1:p:163-168

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  1. Mayda, Anna Maria & Rodrik, Dani, 2005. "Why are some people (and countries) more protectionist than others?," European Economic Review, Elsevier, Elsevier, vol. 49(6), pages 1393-1430, August.
  2. Donald R. Davis, 1996. "Trade Liberalization and Income Distribution," Harvard Institute of Economic Research Working Papers, Harvard - Institute of Economic Research 1769, Harvard - Institute of Economic Research.
  3. Edward J. Balistreri, 1997. "The Performance of the Heckscher-Ohlin-Vanek Model in Predicting Endogenous Policy Forces at the Individual Level," Canadian Journal of Economics, Canadian Economics Association, Canadian Economics Association, vol. 30(1), pages 1-17, February.
  4. Jong-Wha Lee & Phillip Swagel, 1994. "Trade barriers and trade flows across countries and industries," International Finance Discussion Papers, Board of Governors of the Federal Reserve System (U.S.) 476, Board of Governors of the Federal Reserve System (U.S.).
  5. Dutt, Pushan & Mitra, Devashish, 2002. "Endogenous trade policy through majority voting: an empirical investigation," Journal of International Economics, Elsevier, Elsevier, vol. 58(1), pages 107-133, October.
  6. Tavares, Jose & Wacziarg, Romain, 2001. "How democracy affects growth," European Economic Review, Elsevier, Elsevier, vol. 45(8), pages 1341-1378, August.
  7. Kenneth F. Scheve & Matthew J. Slaughter, 1998. "What Determines Individual Trade Policy Preferences?," NBER Working Papers 6531, National Bureau of Economic Research, Inc.
  8. Mussa, Michael, 1974. "Tariffs and the Distribution of Income: The Importance of Factor Specificity, Substitutability, and Intensity in the Short and Long Run," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 82(6), pages 1191-1203, Nov.-Dec..
  9. Alberto Alesina & Romain Wacziarg, 1997. "Openness, Country Size and the Government," NBER Working Papers 6024, National Bureau of Economic Research, Inc.
  10. Francisco Rodriguez & Dani Rodrik, 1999. "Trade Policy and Economic Growth: A Skeptic's Guide to Cross-National Evidence," NBER Working Papers 7081, National Bureau of Economic Research, Inc.
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Cited by:
  1. Cervellati, Matteo & Naghavi, Alireza & Toubal, Farid, 2013. "Trade Liberalization, Democratization and Technology Adoption," IZA Discussion Papers 7132, Institute for the Study of Labor (IZA).

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