Unprotected Resources and Voracious World Markets
The Theory of the Second Best implies that any country with less-than-ideal resources can lose from international trade. Recently it has been suggested this means the South (poor countries) are better off suppressing trade with the North, especially trade in natural resource products, since the North has better developed rights to protect its natural resources. Here we show that the suppression of such trade may also impede the development of property rights in the South, but that even taking this into account, trade liberalization need not improve Southern welfare. We find that within a cone of world prices on the boundary of which lies the South’s autarky price vector, welfare losses still occur even when local governments in the South make optimal choices to enclose the hinterlands. Corollary to the losses, the South can gain from tariffs or quotas and, within a proper subset of the cone of loss, can suffer when the prices of its exports rise.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Hotte, Louis & Long, Ngo Van & Tian, Huilan, 2000. "International trade with endogenous enforcement of property rights," Journal of Development Economics, Elsevier, vol. 62(1), pages 25-54, June.
- Chichilnisky, Graciela, 1994. "North-South Trade and the Global Environment," American Economic Review, American Economic Association, vol. 84(4), pages 851-74, September.
- Brander, James A. & Scott Taylor, M., 1997.
"International trade between consumer and conservationist countries,"
Resource and Energy Economics,
Elsevier, vol. 19(4), pages 267-297, November.
- James Brander & M. Scott Taylor, 1997. "International Trade Between Consumer and Conservationist Countries," NBER Working Papers 6006, National Bureau of Economic Research, Inc.
- Anne O. Krueger, 1997.
"Trade Policy and Economic Development: How We Learn,"
NBER Working Papers
5896, National Bureau of Economic Research, Inc.
- Krueger, Anne O, 1997. "Trade Policy and Economic Development: How We Learn," American Economic Review, American Economic Association, vol. 87(1), pages 1-22, March.
- Helpman, E., 1998.
"The Structure of Foreign Trade,"
18-98, Tel Aviv.
- Elhanan Helpman, 1998. "The Structure of Foreign Trade," Harvard Institute of Economic Research Working Papers 1848, Harvard - Institute of Economic Research.
- Helpman, Elhanan, 1998. "The Structure of Foreign Trade," CEPR Discussion Papers 2020, C.E.P.R. Discussion Papers.
- Elhanan Helpman, 1998. "The Structure of Foreign Trade," NBER Working Papers 6752, National Bureau of Economic Research, Inc.
- Copeland, Brian R & Taylor, M Scott, 1994. "North-South Trade and the Environment," The Quarterly Journal of Economics, MIT Press, vol. 109(3), pages 755-87, August.
- Umbeck, John, 1981. "Might Makes Rights: A Theory of the Formation and Initial Distribution of Property Rights," Economic Inquiry, Western Economic Association International, vol. 19(1), pages 38-59, January.
- Krishna, Pravin & Panagariya, Arvind, 2000. "A unification of second best results in international trade," Journal of International Economics, Elsevier, vol. 52(2), pages 235-257, December.
- de Meza, David & Gould, J R, 1992. "The Social Efficiency of Private Decisions to Enforce Property Rights," Journal of Political Economy, University of Chicago Press, vol. 100(3), pages 561-80, June.
- Cohen, Jon S. & Weitzman, Martin L., 1975. "A Marxian model of enclosures," Journal of Development Economics, Elsevier, vol. 1(4), pages 287-336, November.
- Brander, James A. & Scott Taylor, M., 1998.
"Open access renewable resources: Trade and trade policy in a two-country model,"
Journal of International Economics,
Elsevier, vol. 44(2), pages 181-209, April.
- James A. Brander & M. Scott Taylor, 1996. "Open Access Renewable Resources: Trade and Trade Policy in a Two-CountryModel," NBER Working Papers 5474, National Bureau of Economic Research, Inc.
- BLACKORBY, Ch. & SCHWORM, W. & VENABLES, A., 1986.
"Necessary and sufficient conditions for factor price equalization,"
CORE Discussion Papers
1986047, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Blackorby, Charles & Schworm, William & Venables, Anthony, 1993. "Necessary and Sufficient Conditions for Factor Price Equalization," Review of Economic Studies, Wiley Blackwell, vol. 60(2), pages 413-34, April.
- Wenders, John T, 1987. "On Perfect Rent Dissipation," American Economic Review, American Economic Association, vol. 77(3), pages 456-59, June.
When requesting a correction, please mention this item's handle: RePEc:rff:dpaper:dp-02-30. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Webmaster)
If references are entirely missing, you can add them using this form.