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Endogenous Trade Policy: Political Struggle in the Growth Process

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  • Yoshiaki Sugimoto
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    Abstract

    This paper develops a dynamic theory that accounts for the evolution of trade policy, underlying internal class conflicts, and output growth performance over the last few centuries. By analyzing political responses to the distributional effects of international trade, it finds a prominent interaction between trade policy and the pattern of economic development, and also a significant role for trade liberalization in economic take-off. Consistent with historical evidence for Western Europe, land-scarce economies reach a developed stage through the ebb and flow of liberalism. In contrast, land-abundant countries tend to stagnate because of landlords' opposition to industrialization.

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    File URL: http://www.iser.osaka-u.ac.jp/library/dp/2006/DP0678.pdf
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    Bibliographic Info

    Paper provided by Institute of Social and Economic Research, Osaka University in its series ISER Discussion Paper with number 0678.

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    Date of creation: Dec 2006
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    Handle: RePEc:dpr:wpaper:0678

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    1. Baldwin, Richard E & Martin, Philippe & Ottaviano, Gianmarco I P, 2001. " Global Income Divergence, Trade, and Industrialization: The Geography of Growth Take-Offs," Journal of Economic Growth, Springer, vol. 6(1), pages 5-37, March.
    2. Findlay, Ronald & O'Rourke, Kevin H, 2002. "Commodity Market Integration 1500-2000," CEPR Discussion Papers 3125, C.E.P.R. Discussion Papers.
    3. McDermott, John, 1999. " Mercantilism and Modern Growth," Journal of Economic Growth, Springer, vol. 4(1), pages 55-80, March.
    4. Allen, Robert C., 2001. "The Great Divergence in European Wages and Prices from the Middle Ages to the First World War," Explorations in Economic History, Elsevier, vol. 38(4), pages 411-447, October.
    5. Peter H. Lindert & Jeffrey G. Williamson, 2003. "Does Globalization Make the World More Unequal?," NBER Chapters, in: Globalization in Historical Perspective, pages 227-276 National Bureau of Economic Research, Inc.
    6. O'Rourke, K, 1997. "The European Grain Invasion 1870-1913," Papers 97/02, College Dublin, Department of Political Economy-.
    7. Gene M. Grossman & Elhanan Helpman, 1992. "Protection For Sale," NBER Working Papers 4149, National Bureau of Economic Research, Inc.
    8. Hoffman, Philip T. & Jacks, David S. & Levin, Patricia A. & Lindert, Peter H., 2002. "Real Inequality In Europe Since 1500," The Journal of Economic History, Cambridge University Press, vol. 62(02), pages 322-355, June.
    9. Marvin Goodfriend & John McDermott, 1994. "Early development," Working Paper 94-02, Federal Reserve Bank of Richmond.
    10. Gary D. Hansen & Edward C. Prescott, 2002. "Malthus to Solow," American Economic Review, American Economic Association, vol. 92(4), pages 1205-1217, September.
    11. Christopher Blattman & Jason Hwang & Jeffrey G. Williamson, 2003. "The Terms of Trade and Economic Growth in the Periphery 1870-1938," NBER Working Papers 9940, National Bureau of Economic Research, Inc.
    12. Irwin, Douglas A, 1988. "Welfare Effects of British Free Trade: Debate and Evidence from the 1840s," Journal of Political Economy, University of Chicago Press, vol. 96(6), pages 1142-64, December.
    13. Jonathan Coppel & Martine Durand, 1999. "Trends in Market Openness," OECD Economics Department Working Papers 221, OECD Publishing.
    14. Galor, Oded & Mountford, Andrew, 2002. "Why are a Third of People Indian and Chinese? Trade, Industrialization and Demographic Transition," CEPR Discussion Papers 3136, C.E.P.R. Discussion Papers.
    15. Dan Ben-David & Michael B. Loewy, 1997. "Free Trade, Growth, and Convergence," NBER Working Papers 6095, National Bureau of Economic Research, Inc.
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