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The Economics of Nationalism

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  • Xiaohuan Lan
  • Ben G. Li

Abstract

This paper provides an economic framework for examining how economic openness affects nationalism. Within a country, a region's level of nationalism varies according to its economic interests in its domestic market relative to its foreign market. All else being equal, increasing a region's foreign trade reduces its economic interests in its domestic market and thus weakens its nationalism. This prediction holds both cross-sectionally and over time, as evidenced by our empirical study using the Chinese Political Compass data and the World Value Surveys. Our framework also applies to analysis of nationalism across countries and receives support from cross-country data. (JEL F14, F52, O17, O19, P26, P33)

Suggested Citation

  • Xiaohuan Lan & Ben G. Li, 2015. "The Economics of Nationalism," American Economic Journal: Economic Policy, American Economic Association, vol. 7(2), pages 294-325, May.
  • Handle: RePEc:aea:aejpol:v:7:y:2015:i:2:p:294-325
    Note: DOI: 10.1257/pol.20130020
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    References listed on IDEAS

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    Cited by:

    1. Piegeler, Monika & Röhl, Klaus-Heiner, 2015. "Gründungsförderung in Deutschland: Ein Aktionsplan gegen sinkende Gründerzahlen," IW policy papers 17/2015, Institut der deutschen Wirtschaft Köln (IW) / Cologne Institute for Economic Research.
    2. repec:bla:worlde:v:40:y:2017:i:9:p:1958-1988 is not listed on IDEAS

    More about this item

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F52 - International Economics - - International Relations, National Security, and International Political Economy - - - National Security; Economic Nationalism
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations
    • P26 - Economic Systems - - Socialist Systems and Transition Economies - - - Political Economy
    • P33 - Economic Systems - - Socialist Institutions and Their Transitions - - - International Trade, Finance, Investment, Relations, and Aid

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