Height, trade, and inequality in the Latin American periphery, 1950-2000
Which variables determine whether a country chooses an open or protected market? It has been argued that economic downturn leads to a higher propensity for protectionism. We find for seven Latin American countries in the second half of the 20th century that declining GDP motivated the opening wave, especially during the 1980s. Moreover, inequality could play a role, either in favor of "opening", as Stolper-Samuelson models would predict, or in favor of closing, as recent empirical studies found that open periods were associated with higher inequality. Using anthropometric indicators, we find that inequality in general tended to motivate "closing", whereas inequality did not stimulate opening.
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