When Do Autocracies Start to Liberalize Foreign Trade? Evidence from Four Cases in the Arab World
This paper argues that trade and capital account reforms within autocracies underlie the primacy of foreign currency procurement. A longitudinal comparison of four countries (Morocco, Tunisia, Egypt and Jordan) in the Middle East and North Africa region shows a historical sequencing of reforms. In the 1960s and 1970s, the foreign exchange scarcity was managed primarily by rising restrictions, accumulation of debt and a number of unilateral country-specific strategies, including broader economic openings (infitah) and isolated capital account liberalizations. However, IMF-friendly reforms (orthodox trade liberalization) only became a political option in the context of the extreme fiscal scarcity of the 1980s and 1990s, after the failure of these earlier policies and the drying up of alternative unconditional finance. Additionally, the time differences regarding when orthodox reforms are implemented within autocracies mainly relate to global and regional cycles of different external windfall gains. These findings complement recent debates about the rush to free trade in at least two regards. First, they point to distinct causal mechanisms depending on the type of political regime (for example, autocracy versus democracy), explaining the beginning of trade and capital account liberalizations among developing countries. Second, they reveal the conditional historical influence of neoliberal ideas among structurally similar autocracies.
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- Giavazzi, Francesco & Tabellini, Guido, 2005.
"Economic and political liberalizations,"
Journal of Monetary Economics,
Elsevier, vol. 52(7), pages 1297-1330, October.
- Francesco Giavazzi & Guido Tabellini, 2004. "Economic and Political Liberalizations," Levine's Bibliography 122247000000000724, UCLA Department of Economics.
- Francesco Giavazzi & Guido Tabellini, 2004. "Economic and Political Liberalizations," Working Papers 264, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
- Francesco Giavazzi & Guido Tabellini, 2004. "Economic and Political Liberalizations," CESifo Working Paper Series 1249, CESifo Group Munich.
- Giavazzi, Francesco & Tabellini, Guido, 2004. "Economic and Political Liberalizations," CEPR Discussion Papers 4579, C.E.P.R. Discussion Papers.
- Francesco Giavazzi & Guido Tabellini, 2004. "Economic and Political Liberalizations," NBER Working Papers 10657, National Bureau of Economic Research, Inc.
- Chwieroth, Jeffrey, 2007. "Neoliberal Economists and Capital Account Liberalization in Emerging Markets," International Organization, Cambridge University Press, vol. 61(02), pages 443-463, April.
- Milner, Helen V. & Kubota, Keiko, 2005. "Why the Move to Free Trade? Democracy and Trade Policy in the Developing Countries," International Organization, Cambridge University Press, vol. 59(01), pages 107-143, January. Full references (including those not matched with items on IDEAS)
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