This file is part of IDEAS, which uses RePEc data


[ Papers | Articles | Software | Books | Chapters | Authors | Institutions | JEL Classification | NEP reports | Search | New papers by email | Author registration | Rankings | Volunteers | FAQ | Blog | Help! ]

Inefficient policies, inefficient institutions and trade

Author info | Abstract | Publisher info | Download info | Related research | Statistics
Author Info
Rubén Segura-Cayuela () (Banco de España)

Additional information is available for the following registered author(s):

Abstract

Despite the general belief among economists on the growth-enhancing role of international trade and significant trade opening over the past 25 years, the growth performance of many developing economies, especially of those in Latin America and Africa, has been disappointing. While this poor growth performance has many potential causes, in this paper I argue that part of the reason may be related to the interaction between weak institutions and trade. In particular, I construct a model in which trade opening in societies with weak institutions (in particular autocratic and elite-controlled political systems) may lead to worse economic policies. The reason is that general equilibrium price effects of taxation and expropriation in closed economies also hurt the elites, and this puts a natural barrier against inefficient policies. Trade openness removes this barrier and enables groups with political power to exercise this power in more inefficient ways.

Download Info
To download:

If you experience problems downloading a file, check if you have the proper application to view it first. Information about this may be contained in the File-Format links below. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.bde.es/webbde/SES/Secciones/Publicaciones/PublicacionesSeriadas/DocumentosTrabajo/06/Fic/dt0633e.pdf
File Format: application/pdf
File Function: First version, December 2006
Download Restriction: no

Publisher Info
Paper provided by Banco de España in its series Banco de España Working Papers with number 0633.

Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Length: 53 pages
Date of creation: Dec 2006
Date of revision:
Handle: RePEc:bde:wpaper:0633

Contact details of provider:
Email:
Web page: http://www.bde.es/
More information through EDIRC

For technical questions regarding this item, or to correct its listing, contact: (María D. González. Electronic Dissemination of Information Unit. Research Department. Banco de España).

Related research
Keywords: institutions; political economy; expropriation; property rights; international trade;

Other versions of this item:

Find related papers by JEL classification:
O10 - Economic Development, Technological Change, and Growth - - Economic Development - - - General
P16 - Economic Systems - - Capitalist Systems - - - Political Economy of Capitalism
F10 - International Economics - - Trade - - - General

This paper has been announced in the following NEP Reports:

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Persson, Torsten & Tabellini, Guido, 1994. "Is Inequality Harmful for Growth?," American Economic Review, American Economic Association, vol. 84(3), pages 600-621, June. [Downloadable!] (restricted)
    Other versions:
  2. Bourguignon, F. & Verdier, T., 1999. "Is Financial Openness bad for Education? A Political Economy Perspective on Development," DELTA Working Papers 1999-20, DELTA (Ecole normale supérieure).
    Other versions:
  3. Dani Rodrik, 1998. "Trade Policy and Economic Performance in Sub-Saharan Africa," NBER Working Papers 6562, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  4. Galor, Oded & Mountford, Andrew, 2006. "Trade and the Great Divergence: The Family Connection," CEPR Discussion Papers 5490, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  5. Robert E. Hall & Charles I. Jones, 1999. "Why Do Some Countries Produce So Much More Output per Worker than Others?," NBER Working Papers 6564, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  6. Paolo Epifani & Gino Gancia, 2005. "On Globalization and the Growth of Governments," Economics Working Papers 915, Department of Economics and Business, Universitat Pompeu Fabra, revised Jan 2008. [Downloadable!]
    Other versions:
  7. Jeffrey D. Sachs & Andrew Warner, 1995. "Economic Reform and the Process of Global Integration," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 26(1995-1), pages 1-118. [Downloadable!]
  8. repec:cup:cbooks:9780521671422 is not listed on IDEAS
  9. Andrei A. Levchenko, 2004. "Institutional Quality and International Trade," IMF Working Papers 04/231, International Monetary Fund. [Downloadable!]
    Other versions:
  10. Easterly, William & Levine, Ross, 1997. "Africa's Growth Tragedy: Policies and Ethnic Divisions," The Quarterly Journal of Economics, MIT Press, vol. 112(4), pages 1203-50, November.
    Other versions:
  11. Daron Acemoglu & Simon Johnson & James A. Robinson, 2001. "The Colonial Origins of Comparative Development: An Empirical Investigation," American Economic Review, American Economic Association, vol. 91(5), pages 1369-1401, December. [Downloadable!] (restricted)
    Other versions:
  12. Jeffrey Sachs & Andrew Warner, 1995. "Economic Reform and the Progress of Global Integration," Harvard Institute of Economic Research Working Papers 1733, Harvard - Institute of Economic Research.
  13. Ruben Segura-Cayuela, 2006. "Inefficient Policies, Inefficient Institutions and Trade," 2006 Meeting Papers 502, Society for Economic Dynamics. [Downloadable!]
    Other versions:
  14. Verdier, Thierry, 2004. "Socially Responsible Trade Integration: A Political Economy Perspective," CEPR Discussion Papers 4699, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  15. François Bourguignon & Thierry Verdier, 2005. "The Political Economy of Education and Development in an Open Economy," Review of International Economics, Blackwell Publishing, vol. 13(3), pages 529-548, 08. [Downloadable!] (restricted)
    Other versions:
Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Praveen Kujal & Juan Ruiz, 2007. "Cost effectiveness of R&D and strategic trade policy," Banco de España Working Papers 0701, Banco de España. [Downloadable!]
    Other versions:
  2. Howard Petith, 2007. "Sobre "Clase y Explotación" en la Corriente Principal de la Economía," UFAE and IAE Working Papers 688.07, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC). [Downloadable!]
  3. Daron Acemoglu, 2006. "Modeling Inefficient Institutions," NBER Working Papers 11940, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  4. de Gorter, Harry, 2008. "Explaining Inefficient Policy Instruments," Agricultural Distortions Working Paper 48638, World Bank. [Downloadable!]
  5. Philip Vermeulen & Daniel Dias & Maarten Dossche & Erwan Gautier & Ignacio Hernando & Roberto Sabbatini & Harald Stahl, 2007. "Price setting in the euro area: some stylised facts from individual producer price data," Banco de España Working Papers 0703, Banco de España. [Downloadable!]
    Other versions:
  6. Agustín Maravall & Ana del Río, 2007. "Temporal aggregation, systematic sampling, and the Hodrick-Prescott filter," Banco de España Working Papers 0728, Banco de España. [Downloadable!]
  7. Ricardo Gimeno & Juan M. Nave, 2006. "Genetic algorithm estimation of interest rate term structure," Banco de España Working Papers 0634, Banco de España. [Downloadable!]
  8. Rubén Segura-Cayuela, 2006. "Inefficient policies, inefficient institutions and trade," Banco de España Working Papers 0633, Banco de España. [Downloadable!]
    Other versions:
  9. Navas-Ruiz, Antonio, 2009. "Trade Openness, Institutional Change and Economic Growth," Working Papers in Economic Theory 2009/05, Universidad Autónoma de Madrid (Spain), Department of Economic Analysis (Economic Theory and Economic History). [Downloadable!]
  10. Enrique Alberola & José María Serena, 2007. "Global financial integration, monetary policy and reserve accumulation. Assessing the limits in emerging economies," Banco de España Working Papers 0706, Banco de España. [Downloadable!]
Statistics
Access and download statistics

Did you know? All RePEc services are meant to be be free forever, as they are all run by volunteers.

This page was last updated on 2009-12-3.

This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.