Political Limits to Globalization
AbstractDespite the major advances in information technology that have shaped the recent wave of globalization, openness to trade is still a political choice, and trade policy can change with shifts in domestic political equilibria. This paper suggests that a particular threat and a limiting factor to globalization and its future developments may be militarist sentiments that appear to be on the rise among many nations around the globe today. We proxy militarism by spending on the military and the size of the military, and document that over the past 20 years, countries experiencing greater increases in militarism according to these measures have had lower growth in trade. Focusing on bilateral trade flows, we also show that controlling flexibly for country trends, a pair of countries jointly experiencing greater increases in militarism has lower growth in bilateral trade.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 15694.
Date of creation: Jan 2010
Date of revision:
Publication status: published as Daron Acemoglu & Pierre Yared, 2010. "Political Limits to Globalization," American Economic Review, American Economic Association, vol. 100(2), pages 83-88, May.
Note: IFM ME POL
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Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
Web page: http://www.nber.org
More information through EDIRC
Other versions of this item:
- F01 - International Economics - - General - - - Global Outlook
- F10 - International Economics - - Trade - - - General
- F52 - International Economics - - International Relations, National Security, and International Political Economy - - - National Security; Economic Nationalism
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-02-20 (All new papers)
- NEP-CBA-2010-02-20 (Central Banking)
- NEP-CDM-2010-02-20 (Collective Decision-Making)
- NEP-DEV-2010-02-20 (Development)
- NEP-INT-2010-02-20 (International Trade)
- NEP-LAM-2010-02-20 (Central & South America)
- NEP-POL-2010-02-20 (Positive Political Economics)
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