Advanced Search
MyIDEAS: Login to save this paper or follow this series

Autocracy, Democracy and Trade Policy

Contents:

Author Info

  • Sebastian Galiani
  • Gustavo Torrens

Abstract

This paper develops a politico-economic model for use in studying the role of intra-elite conflict in the simultaneous determination of a country’s political regime, trade policy and income-tax-based redistribution scheme. Three socioeconomic groups are involved: two elite groups and workers, whose preferences regarding trade policy and income taxation are derived from a simple open-economy model. The critical point is that income taxation induces a rich-poor/elite-workers political cleavage, while trade policy opens the door to intra-elite conflict. In this model, when there is no intra-elite conflict, changes in trade policy are associated with political transitions. Coups (democratizations) open up the economy if and only if both elite factions are pro-free-trade (protectionist). However, in the presence of intra-elite conflict, autocracies respond to popular revolts by changing trade their policy and reallocating political power within the elite (to the elite group with the same trade policy preference as the workers) rather than offering to democratize the country. The change in trade policy is credible because the elite group with the same trade policy preference as the workers controls the autocracy. Moreover, in the presence of intra-elite conflict, coups tend to result in the maintenance of the existing trade policy unless popular demands are extremely radical and/or the elite group with the same trade policy preference as the workers is exceptionally weak.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.nber.org/papers/w19321.pdf
Download Restriction: Access to the full text is generally limited to series subscribers, however if the top level domain of the client browser is in a developing country or transition economy free access is provided. More information about subscriptions and free access is available at http://www.nber.org/wwphelp.html. Free access is also available to older working papers.

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 19321.

as in new window
Length:
Date of creation: Aug 2013
Date of revision:
Publication status: published as Galiani, Sebastian & Torrens, Gustavo, 2014. "Autocracy, democracy and trade policy," Journal of International Economics, Elsevier, vol. 93(1), pages 173-193.
Handle: RePEc:nbr:nberwo:19321

Note: DEV
Contact details of provider:
Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
Phone: 617-868-3900
Email:
Web page: http://www.nber.org
More information through EDIRC

Related research

Keywords:

Other versions of this item:

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Acemoglu, Daron & Robinson, James A, 1998. "Why did the West Extend the Franchise? Democracy, Inequality and Growth in Historical Perspective," CEPR Discussion Papers, C.E.P.R. Discussion Papers 1797, C.E.P.R. Discussion Papers.
  2. Galiani, Sebastian & Heymann, Daniel & Dabús, Carlos & Tohmé, Fernando, 2008. "On the emergence of public education in land-rich economies," Journal of Development Economics, Elsevier, Elsevier, vol. 86(2), pages 434-446, June.
  3. repec:cup:cbooks:9780521855266 is not listed on IDEAS
  4. Daron Acemoglu, 2010. "Institutions, Factor Prices, and Taxation: Virtues of Strong States?," American Economic Review, American Economic Association, American Economic Association, vol. 100(2), pages 115-19, May.
  5. Francesco Caselli & Nicola Gennaioli, 2007. "Economics and politics of alternative institutional reforms," LSE Research Online Documents on Economics, London School of Economics and Political Science, LSE Library 3557, London School of Economics and Political Science, LSE Library.
  6. Daron Acemoglu & Pierre Yared, 2010. "Political Limits to Globalization," American Economic Review, American Economic Association, American Economic Association, vol. 100(2), pages 83-88, May.
  7. O'Rourke, Kevin H & Taylor, Alan M, 2006. "Democracy and Protectionism," CEPR Discussion Papers, C.E.P.R. Discussion Papers 5698, C.E.P.R. Discussion Papers.
  8. Ronald Findlay & Kevin H. O'Rourke, 2007. "Power and Plenty: Trade, War and the World Economy in the Second Millennium (Preface)," Trinity Economics Papers, Trinity College Dublin, Department of Economics tep0107, Trinity College Dublin, Department of Economics.
  9. Alessandro Lizzeri & Nicola Persico, 2004. "Why Did the Elites Extend the Suffrage? Democracy and the Scope of Government, With an Application to Britain's "Age of Reform"," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 119(2), pages 705-763, May.
  10. Cheryl Schonhardt-Bailey, 2006. "From the Corn Laws to Free Trade: Interests, Ideas, and Institutions in Historical Perspective," MIT Press Books, The MIT Press, The MIT Press, edition 1, volume 1, number 0262195437, December.
  11. Ghosal, Sayantan & Proto, Eugenio, 2008. "Democracy, Collective Action and Intra-elite Conflict," The Warwick Economics Research Paper Series (TWERPS), University of Warwick, Department of Economics 844, University of Warwick, Department of Economics.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Sebastian Galiani & Gustavo Torrens & Maria Lucia Yanguas, 2014. "The Political Coase Theorem: Experimental Evidence," NBER Working Papers 19943, National Bureau of Economic Research, Inc.
  2. Ben Zissimos, 2014. "A Theory of Trade Policy Under Dictatorship and Democratization," Discussion Papers, Exeter University, Department of Economics 1403, Exeter University, Department of Economics.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:19321. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.