Endogenous Trade Policy: Political Struggle in the Growth Process

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Endogenous Trade Policy: Political Struggle in the Growth Process

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Yoshiaki Sugimoto

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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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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