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Appropriation, Property Rights Institutions, and International Trade

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  • Christodoulos Stefanadis

Abstract

In producer-friendly economies—economies that are ruled by productive agents and have strong property rights institutions—international trade causes an institutional improvement and an aggregate shift of talent towards production, and away from socially wasteful appropriation. However, in predator-friendly economies—economies that are ruled by rent seekers and have weak institutions—international trade leads to an institutional deterioration, and a more unfavorable talent allocation. (JEL D72, F12, K11)

Suggested Citation

  • Christodoulos Stefanadis, 2010. "Appropriation, Property Rights Institutions, and International Trade," American Economic Journal: Economic Policy, American Economic Association, vol. 2(4), pages 148-172, November.
  • Handle: RePEc:aea:aejpol:v:2:y:2010:i:4:p:148-72 Note: DOI: 10.1257/pol.2.4.148
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    References listed on IDEAS

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    1. Kevin M. Murphy & Andrei Shleifer & Robert W. Vishny, 1991. "The Allocation of Talent: Implications for Growth," The Quarterly Journal of Economics, Oxford University Press, pages 503-530.
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    3. Krugman, Paul R, 1981. "Intraindustry Specialization and the Gains from Trade," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 959-973, October.
    4. Acemoglu, Daron, 1995. "Reward structures and the allocation of talent," European Economic Review, Elsevier, vol. 39(1), pages 17-33, January.
    5. Rubén Segura-Cayuela, 2006. "Inefficient policies, inefficient institutions and trade," Working Papers 0633, Banco de España;Working Papers Homepage.
    6. Krugman, Paul, 1980. "Scale Economies, Product Differentiation, and the Pattern of Trade," American Economic Review, American Economic Association, vol. 70(5), pages 950-959, December.
    7. Michael Mitsopoulos and Theodore Pelagidis, 2009. "Vikings in Greece: Kleptocratic Interest Groups in a Closed, Rent-Seeking Economy," Cato Journal, Cato Journal, Cato Institute, pages 399-416.
    8. Tavares, Samia Costa, 2007. "Do rapid political and trade liberalizations increase corruption?," European Journal of Political Economy, Elsevier, vol. 23(4), pages 1053-1076, December.
    9. Marcouiller, Douglas & Young, Leslie, 1995. "The Black Hole of Graft: The Predatory State and the Informal Economy," American Economic Review, American Economic Association, vol. 85(3), pages 630-646, June.
    10. Daron Acemoglu & James A. Robinson, 2006. "De Facto Political Power and Institutional Persistence," American Economic Review, American Economic Association, vol. 96(2), pages 325-330, May.
    11. Grossman, Herschel I. & Kim, Minseong, 2000. "Predators, moral decay, and moral revivals," European Journal of Political Economy, Elsevier, vol. 16(2), pages 173-187, June.
    12. Krugman, Paul R., 1979. "Increasing returns, monopolistic competition, and international trade," Journal of International Economics, Elsevier, pages 469-479.
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    Citations

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    Cited by:

    1. Andrei A. Levchenko, 2013. "International Trade and Institutional Change," Journal of Law, Economics, and Organization, Oxford University Press, vol. 29(5), pages 1145-1181, October.
    2. Cervellati, Matteo & Naghavi, Alireza & Toubal, Farid, 2013. "Trade Liberalization, Democratization and Technology Adoption," IZA Discussion Papers 7132, Institute for the Study of Labor (IZA).
    3. Arghya Ghosh & Peter Robertson, 2012. "Trade and expropriation," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 50(1), pages 169-191, May.
    4. Do, Quy-Toan & Levchenko, Andrei A., 2009. "Trade, inequality, and the political economy of institutions," Journal of Economic Theory, Elsevier, vol. 144(4), pages 1489-1520, July.
    5. Vincenzo Bove & Leandro Elia & Petros G. Sekeris, 2014. "US Security Strategy and the Gains from Bilateral Trade," Review of International Economics, Wiley Blackwell, pages 863-885.
    6. Mehrdad Vahabi, 2011. "Appropriation, violent enforcement, and transaction costs: a critical survey," Public Choice, Springer, vol. 147(1), pages 227-253, April.

    More about this item

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • K11 - Law and Economics - - Basic Areas of Law - - - Property Law

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