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Property rights and the dynamics of North-South trade, chapter 8


  • Chichilnisky, Graciela


This chapter focuses on how the lack of property rights in North-South trade of primary resources can distort trade and threaten the sustainablility of development. This issue is examined within a two-region world economy where one region, the North, represents the industrial countries, and the other, the South, the developing countries. The lack of property rights characterizes a class of environmental problems arising from the use of renewable resources as inputs in the production of traded goods. Focus is placed on renewable resources because it can be argued that sustainable development is all about the proper management of the world's natural resources. There are two significant departures from traditional theory. The first is that one input in production is an environmental resource. The second major departure from traditional theory is that the regions are characterized by their property rights regimes based on the source from which resources are extracted. It is shown that differences in property rights are sufficient to explain differing trade patterns between two otherwise identical regions, even if these regions have the same endowments, preferences, and technologies. The succeeding sections of this chapter provide the following. Lemma 1 studies population dynamics, and the connection between property rights and the long-run supply curve of the renewable resource. The next step is to analyze market behavior. The general equilibrium model of North-South trade is defined, and solved in one explicit resolving equation provided in the Appendix.

Suggested Citation

  • Chichilnisky, Graciela, 1996. "Property rights and the dynamics of North-South trade, chapter 8," MPRA Paper 8514, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:8514

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    References listed on IDEAS

    1. Chichilnisky, Graciela, 1994. "North-South Trade and the Global Environment," American Economic Review, American Economic Association, vol. 84(4), pages 851-874, September.
    2. Barbier, E B & Burgess, J C, 2001. " The Economics of Tropical Deforestation," Journal of Economic Surveys, Wiley Blackwell, vol. 15(3), pages 413-433, July.
    3. Chichilnisky, Graciela, 1981. "Terms of trade and domestic distribution : Export-led growth with abundant labour," Journal of Development Economics, Elsevier, vol. 8(2), pages 163-192, April.
    4. Chichilnisky, Graciela, 1986. "A general equilibrium theory of North-South trade," MPRA Paper 8810, University Library of Munich, Germany.
    5. Graciela Chichilnisky, 1990. "On The Mathematical Foundations Of Political Economy," Contributions to Political Economy, Oxford University Press, vol. 9(1), pages 25-41.
    6. Chichilnisky, Graciela, 1994. "Traditional comparative advantage vs. increasing returns to scale: NAFTA and the GATT," MPRA Paper 8360, University Library of Munich, Germany.
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    Cited by:

    1. Peter Walkenhorst, 2004. "Domestic And International Environmental Impacts Of Agricultural Trade Liberalisation," International Trade 0401010, EconWPA.

    More about this item


    sustainable development; property rights; renewable resources; general equilibrium;

    JEL classification:

    • O24 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q27 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Issues in International Trade


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