Trade, Factor Proportions and Political Rights
This paper tests the implication of the Stolper-Samuelson theorem that capital-poor individuals prefer more trade openness in poor (capital-scarce) countries and less trade in rich (labor-scarce) countries, by using a broad panel of countries and new exogenous determinants of trade openness. According to the seminal work in Mayer (1984), capital-poor individuals prefer more trade openness in poor (capital-scarce) countries and less trade openness in rich (labor-scarce) countries. We use the level of political rights as a proxy for the relative capital-labor endowment of the median voter so that an increase in political rights should have asymmetric effects in poor and rich countries: an increase in political rights should lead to more openness in capital poor countries and less openness in capital rich countries. Our results show that, while both income per capita and political rights are positively associated with import intensity, their interaction has a negative and very robust negative association with openness. Increases in political rights lead to sizeable decreases in import intensity after a given income per capita threshold has been surpassed. Our results are robust to the inclusion of structural, geography and cultural determinants of openness, different estimation methods and different proxies for country endowments.
|Date of creation:||2003|
|Contact details of provider:|| Postal: Campus de Campolide, 1099-032 Lisboa|
Phone: (351) 21 3801638
Fax: (351) 21 3870933
Web page: http://www.fe.unl.pt
More information through EDIRC
References listed on IDEAS
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.:
- Mussa, Michael, 1974. "Tariffs and the Distribution of Income: The Importance of Factor Specificity, Substitutability, and Intensity in the Short and Long Run," Journal of Political Economy, University of Chicago Press, vol. 82(6), pages 1191-1203, Nov.-Dec..
- Kenneth F. Scheve & Matthew J. Slaughter, 1998. "What Determines Individual Trade Policy Preferences?," NBER Working Papers 6531, National Bureau of Economic Research, Inc.
- Mayda, Anna Maria & Rodrik, Dani, 2005.
"Why are some people (and countries) more protectionist than others?,"
European Economic Review,
Elsevier, vol. 49(6), pages 1393-1430, August.
- Anna Maria Mayda & Dani Rodrik, 2001. "Why Are Some People (and Countries) More Protectionist Than Others?," NBER Working Papers 8461, National Bureau of Economic Research, Inc.
- Anna Maria Mayda (Georgetown University) and Dani Rodrik (Harvard University), 2005. "Why are some people (and countries) more protectionist than others?," Working Papers gueconwpa~05-05-11, Georgetown University, Department of Economics.
- Mayda, Anna Maria & Rodrik, Dani, 2001. "Why are Some People (and Countries) More Protectionist than Others?," CEPR Discussion Papers 2960, C.E.P.R. Discussion Papers.
- Tavares, Jose & Wacziarg, Romain, 2001. "How democracy affects growth," European Economic Review, Elsevier, vol. 45(8), pages 1341-1378, August.
- Edward J. Balistreri, 1997. "The Performance of the Heckscher-Ohlin-Vanek Model in Predicting Endogenous Policy Forces at the Individual Level," Canadian Journal of Economics, Canadian Economics Association, vol. 30(1), pages 1-17, February.
- Jong-Wha Lee & Phillip Swagel, 2000. "Trade Barriers And Trade Flows Across Countries And Industries," The Review of Economics and Statistics, MIT Press, vol. 79(3), pages 372-382, August.
- Jong-Wha Lee & Phillip Swagel, 1994. "Trade barriers and trade flows across countries and industries," International Finance Discussion Papers 476, Board of Governors of the Federal Reserve System (U.S.).
- Jong-Wha Lee & Phillip Swagel, 1994. "Trade Barriers and Trade Flows across Countries and Industries," NBER Working Papers 4799, National Bureau of Economic Research, Inc.
- Donald R. Davis, 1996. "Trade Liberalization and Income Distribution," Harvard Institute of Economic Research Working Papers 1769, Harvard - Institute of Economic Research.
- Donald R. Davis, 1996. "Trade Liberalization and Income Distribution," NBER Working Papers 5693, National Bureau of Economic Research, Inc.
- Dutt, Pushan & Mitra, Devashish, 2002. "Endogenous trade policy through majority voting: an empirical investigation," Journal of International Economics, Elsevier, vol. 58(1), pages 107-133, October.
- Francisco Rodriguez & Dani Rodrik, 1999. "Trade Policy and Economic Growth: A Skeptic's Guide to Cross-National Evidence," NBER Working Papers 7081, National Bureau of Economic Research, Inc.
- Alberto Alesina & Romain Wacziarg, 1997. "Openness, Country Size and the Government," NBER Working Papers 6024, National Bureau of Economic Research, Inc. Full references (including those not matched with items on IDEAS)