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Globalization and Insecurity: Reviewing Some Basic Issues

Author

Listed:
  • Michelle R. Garfinkel

    () (Department of Economics, University of California-Irvine)

  • Stergios Skaperdas

    () (Department of Economics, University of California-Irvine)

  • Constantinos Syropoulos

    () (Department of Economics and International Business, Drexel University)

Abstract

We argue that the costs of domestic and transnational insecurity are large and economically significant and that they may vary with the trade regime of a country. Then, in evaluating trade regimes, the gains from trade need to be weighed against the change in the security costs they induce. Within a simple model of trade, small countries that import a contested resource unambiguously gain from free trade. However, exporters of a contested resource incur additional security costs that are higher than the gains from trade compared to autarky, as long as the international price of the contested resource is not too high. We conclude with a discussion of how domestic and transnational governance could reduce insecurity.

Suggested Citation

  • Michelle R. Garfinkel & Stergios Skaperdas & Constantinos Syropoulos, 2008. "Globalization and Insecurity: Reviewing Some Basic Issues," Working Papers 080901, University of California-Irvine, Department of Economics.
  • Handle: RePEc:irv:wpaper:080901
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    File URL: https://www.economics.uci.edu/files/docs/workingpapers/2008-09/garfinkel-01.pdf
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    References listed on IDEAS

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    Cited by:

    1. Libman, Alexander Mikhailovich, 2009. "Эндогенные Границы И Распределение Власти В Федерациях И Международных Сообществах
      [ENDOGENOUS BOUNDARIES AND DISTRIBUTION OF POWER In the Federation]
      ," MPRA Paper 16473, University Library of Munich, Germany.

    More about this item

    Keywords

    Globalization; Trade openness; Property rights; Enforcement; Insecurity;

    JEL classification:

    • D30 - Microeconomics - - Distribution - - - General
    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • F2 - International Economics - - International Factor Movements and International Business
    • F10 - International Economics - - Trade - - - General

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