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Democracy and Protectionism

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  • O'Rourke, Kevin H
  • Taylor, Alan M

Abstract

Does democracy encourage free trade? It depends. Broadening the franchise involves transferring power from non-elected elites to the wider population, most of whom will be workers. The Hecksher-Ohlin-Stolper-Samuelson logic says that democratization should lead to more liberal trade policies in countries where workers stand to gain from free trade; and to more protectionist policies in countries where workers will benefit from the imposition of tariffs and quotas. We test and confirm these political economy implications of trade theory hypothesis using data on democracy, factor endowments, and protection in the late nineteenth century.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 5698.

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Date of creation: May 2006
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Handle: RePEc:cpr:ceprdp:5698

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Keywords: factor endowments; Heckscher-Ohlin trade theory; Stolper-Samuelson theorem; tariffs;

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References

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  6. Barro, Robert J, 1996. " Democracy and Growth," Journal of Economic Growth, Springer, vol. 1(1), pages 1-27, March.
  7. Scott L. Baier & Gerald P. Dwyer, Jr. & Robert Tamura, 2002. "How important are capital and total factor productivity for economic growth?," Working Paper 2002-2a, Federal Reserve Bank of Atlanta.
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  10. 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(1, 25th A), pages 1-118.
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Citations

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Cited by:
  1. Barry Eichengreen, 2006. "Democracy and Globalization," NBER Working Papers 12450, National Bureau of Economic Research, Inc.
  2. Jan Fałkowski & Alessandro Olper, 2012. "Political Competition and Policy Choices: The Evidence From Agricultural Protection," Working Papers 2012-18, Faculty of Economic Sciences, University of Warsaw.
  3. Alessandro Olper & Jan Falkowski & Johan Swinnen, 2009. "Political Reforms and Public Policies: Evidence from Agricultural Protection," LICOS Discussion Papers 25109, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
  4. International Monetary Fund, 2010. "On the Distributive Effects of Terms of Trade Shocks: The Role of Non-tradable Goods," IMF Working Papers 10/241, International Monetary Fund.
  5. Teng, Faxin, 2008. "Warum sind manche Individuen und Länder protektionistischer als andere?
    [Why Are Some People and Countries More Protectionist than Others?]    ," MPRA Paper 31958, University Library of Munich, Germany.
  6. Aidt, T.S. & Gassebner, M., 2007. "Do Autocratic States Trade Less?," Cambridge Working Papers in Economics 0742, Faculty of Economics, University of Cambridge.
  7. Sebastian Galiani & Norman Schofield, 2010. "Factor Endowments, Democracy and Trade Policy Divergence," DEGIT Conference Papers c015_027, DEGIT, Dynamics, Economic Growth, and International Trade.
  8. Jessica Decker & Jamus Lim, 2009. "Democracy and trade: an empirical study," Economics of Governance, Springer, vol. 10(2), pages 165-186, April.
  9. Toke Aidt & Peter Jensen, 2009. "Tax structure, size of government, and the extension of the voting franchise in Western Europe, 1860–1938," International Tax and Public Finance, Springer, vol. 16(3), pages 362-394, June.
  10. Rui P. Esteves, 2011. "The Political Economy of Global Financial Liberalisation in Historical Perspective," Oxford University Economic and Social History Series _089, Economics Group, Nuffield College, University of Oxford.
  11. Timothy J. Hatton & Jeffrey G. Williamson, 2005. "A Dual Policy Paradox: Why Have Trade and Immigration Policies Always Differed in Labor-Scarce Economies," NBER Working Papers 11866, National Bureau of Economic Research, Inc.
  12. Rami Abdelkafi & Hatem Derbel & Ali Chkir, 2009. "Libéralisme Économique et Croissance: Le Cas de Six Pays Méditerranéens," EconomiX Working Papers 2009-35, University of Paris West - Nanterre la Défense, EconomiX.
  13. Yu, Miaojie, 2010. "Trade, democracy, and the gravity equation," Journal of Development Economics, Elsevier, vol. 91(2), pages 289-300, March.
  14. Barbara Dluhosch & Nikolai Ziegler, 2011. "The paradox of weakness in the politics of trade integration," Constitutional Political Economy, Springer, vol. 22(4), pages 325-354, December.

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