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Endogenous Globalization and Income Divergence

  • Yoshiaki Sugimoto

    (Department of Economics, European University Institute)

This paper develops a growth theory that accounts for the evolution of trade policy, underlying internal class conflicts, and global income divergence over the last few centuries. By analyzing political responses to the distributional effects of international trade, this paper finds a prominent interaction between trade policy and the pattern of economic development, and suggests that the nature of the interaction depends on a country's resource abundance and distribution. As shown by the example of Western Europe, land-scarce countries will reach a developed stage through a non-monotonic evolution of trade policy. In contrast, land- abundant countries, especially those with concentrated landownership, tend to fail to take off because of landlords' opposition to industrialization.

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Paper provided by EconWPA in its series Development and Comp Systems with number 0503003.

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Length: 54 pages
Date of creation: 12 Mar 2005
Date of revision:
Handle: RePEc:wpa:wuwpdc:0503003
Note: Type of Document - pdf; pages: 54
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  12. Jonathan Coppel & Martine Durand, 1999. "Trends in Market Openness," OECD Economics Department Working Papers 221, OECD Publishing.
  13. Hoffman, Philip T. & Jacks, David S. & Levin, Patricia A. & Lindert, Peter H., 2002. "Real Inequality In Europe Since 1500," The Journal of Economic History, Cambridge University Press, vol. 62(02), pages 322-355, June.
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  18. Scheve, Kenneth F. & Slaughter, Matthew J., 2001. "What determines individual trade-policy preferences?," Journal of International Economics, Elsevier, vol. 54(2), pages 267-292, August.
  19. Allen, Robert C., 2001. "The Great Divergence in European Wages and Prices from the Middle Ages to the First World War," Explorations in Economic History, Elsevier, vol. 38(4), pages 411-447, October.
  20. Alan M. Taylor, 2002. "Globalization, Trade, and Development: Some Lessons From History," NBER Working Papers 9326, National Bureau of Economic Research, Inc.
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