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Trade and the Pattern of European Imperialism, 1492-2000

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  • Roberto Bonfatti

Abstract

I construct a trade model of empire, and use it to interpret some of the key patterns in the history of European imperialism. I begin from the observation that trade was a key source of wealth for the colonies, and trade restrictions a key tool of extraction for colonial powers. But the value of this tool must be seen in relation to the value of colonial trade, and to the extent of international competition for it. The model interprets the colonial empires that emerged in the 16th-18th century as a set of political institutions designed to appropriate the value of colonial trade to the mother country, at a time in which colonial trade was both valuable and highly competed for. It explains the fluctuations in the fortunes of empire in the 19th and early 20th century with the rise of a clear industrial leader, Britain, and her subsequent decline. Finally, it attributes the fall of colonial empires to a secular fall in the importance of colonial trade, relative to trade between the industrial countries. I provide detailed historical evidence in support of these predictions. The model also has predictions for the impact of empire-building on trade relations between the imperial powers. These are consistent with the apparent inverse relation between European imperial expansion and globalization.

Suggested Citation

  • Roberto Bonfatti, 2012. "Trade and the Pattern of European Imperialism, 1492-2000," Economics Series Working Papers 618, University of Oxford, Department of Economics.
  • Handle: RePEc:oxf:wpaper:618
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    File URL: http://www.economics.ox.ac.uk/materials/papers/12115/paper618.pdf
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    References listed on IDEAS

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    1. Kevin H. O'Rourke, Leandro Prados de la Escosura and Guilllaume Daudin, 2008. "Trade and Empire, 1700-1870," The Institute for International Integration Studies Discussion Paper Series iiisdp249, IIIS.
    2. Jeffrey G. Williamson, 2008. "Globalization and the Great Divergence: Terms of Trade Booms and Volatility in the Poor Periphery 1782-1913," Working Papers 08-07, Association Française de Cliométrie (AFC).
    3. Carlos, Ann M., 2003. "The Rise of Commercial Empires: England and the Netherlands in the Age of Mercantilism, 1650 1770. By David Ormond. Cambridge: Cambridge University Press, 2003. Pp. ix, 388. $75.00," The Journal of Economic History, Cambridge University Press, vol. 63(04), pages 1154-1155, December.
    4. Emanuel Ornelas, 2005. "Rent Destruction and the Political Viability of Free Trade Agreements," The Quarterly Journal of Economics, Oxford University Press, vol. 120(4), pages 1475-1506.
    5. Robert C. Allen, 2003. "Progress and poverty in early modern Europe," Economic History Review, Economic History Society, vol. 56(3), pages 403-443, August.
    6. Robert W. Staiger & Kyle Bagwell, 1999. "An Economic Theory of GATT," American Economic Review, American Economic Association, vol. 89(1), pages 215-248, March.
    7. John Gallagher & Ronald Robinson, 1953. "The Imperialism Of Free Trade," Economic History Review, Economic History Society, vol. 6(1), pages 1-15, August.
    8. Garfinkel , Michelle & Skaperdas, Stergios & Syropoulos, Constantinos, 2012. "Trade and Insecure Resources: Implications for Welfare and Comparative Advantage," School of Economics Working Paper Series 2012-8, LeBow College of Business, Drexel University.
    9. Krugman, Paul R, 1981. "Intraindustry Specialization and the Gains from Trade," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 959-973, October.
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    Cited by:

    1. repec:eee:inecon:v:108:y:2017:i:c:p:137-156 is not listed on IDEAS
    2. Gino Gancia, 2014. "Globalization and Political Structure," 2014 Meeting Papers 644, Society for Economic Dynamics.
    3. Bonfatti, Roberto, 2017. "The sustainability of empire in a global perspective: The role of international trade patterns," Journal of International Economics, Elsevier, vol. 108(C), pages 137-156.

    More about this item

    Keywords

    Imperialism; Preferential trade agreements; Intra-industry trade; Hegemonic stability;

    JEL classification:

    • F1 - International Economics - - Trade
    • F5 - International Economics - - International Relations, National Security, and International Political Economy
    • N4 - Economic History - - Government, War, Law, International Relations, and Regulation

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