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Geography, Policy, or Productivity? Regional Trade in five South American Countries, 1910-1950

Author

Listed:
  • Marc Badia-Miró
  • Anna Carreras-Marín
  • Christopher M. Meissner

Abstract

Regional trade in South America since independence has long been much smaller than would be expected if geography were the only constraint on trade. Several potential explanations exist: low technological and demand complementarities; low productivity; high natural and policy barriers to trade. Focusing on the latter explanations, policy makers have long advocated a South American/Southern Cone Free Trade Area–proposed as early as 1889. Would reductions in trade costs have been sufficient to significantly raise trade, or was trade low for other reasons? We study bilateral trade between 1910 and 1950, when large external shocks altered global supply and demand. These shocks help us show that intra-regional trade could have been boosted with reductions in trade costs. South American regional trade could have benefitted from more benign trade policy or better infrastructure. Regional trade in textiles, which took off from the 1930s, supports our argument that trade improved when trade costs fell.

Suggested Citation

  • Marc Badia-Miró & Anna Carreras-Marín & Christopher M. Meissner, 2014. "Geography, Policy, or Productivity? Regional Trade in five South American Countries, 1910-1950," NBER Working Papers 20790, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:20790 Note: DAE
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    File URL: http://www.nber.org/papers/w20790.pdf
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    References listed on IDEAS

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    5. Michael Huberman, 2013. "One world of labour regulation, two worlds of trade: examples of Belgium and Brazil," European Review of Economic History, Oxford University Press, vol. 17(3), pages 251-271, August.
    6. Anna Carreras-Marín & Marc Badia-Miró & José Peres Cajías, 2013. "Intraregional Trade in South America, 1912-1950: The Cases of Argentina, Bolivia, Brazil, Chile and Peru," Economic History of Developing Regions, Taylor & Francis Journals, vol. 28(2), pages 1-26, December.
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    Cited by:

    1. Vicente Pinilla & Agustina Rayes, 2017. "Why did Argentina become a super-exporter of agricultural and food products during the Belle Époque (1880-1929)?," Working Papers 0107, European Historical Economics Society (EHES).

    More about this item

    JEL classification:

    • F02 - International Economics - - General - - - International Economic Order and Integration
    • F15 - International Economics - - Trade - - - Economic Integration
    • N16 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Latin America; Caribbean
    • N76 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services - - - Latin America; Caribbean

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