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Endogenous Globalization and Income Divergence

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  • Yoshiaki Sugimoto
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    Abstract

    This paper develops a growth theory that accounts for the evolution of trade policy, underlying internal class conflicts, and global income divergence over the last few centuries. By analyzing political responses to the distributional effects of international trade, this paper finds a prominent interaction between trade policy and the pattern of economic development, and suggests that the nature of the interaction depends on a country's resource abundance and distribution. As shown by the example of Western Europe, land-scarce countries will reach a developed stage through a non-monotonic evolution of trade policy. In contrast, land-abundant countries, especially those with concentrated landownership, tend to fail to take o¤ because of landlords' opposition to industrialization.

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    Bibliographic Info

    Paper provided by European University Institute in its series Economics Working Papers with number ECO2005/03.

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    Date of creation: 2005
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    Handle: RePEc:eui:euiwps:eco2005/03

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    Keywords: Trade Policy; Growth; Class Conflict;

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