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A theory of trade policy under dictatorship and democratization

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  • Zissimos, Ben
Abstract
This paper develops a new model of trade policy under dictatorship and democratization. The paper makes two contributions. One is to provide a deeper understanding of the relationship between political institutions and economic efficiency by studying the endogenous interaction between the form of government and trade policy. The paper's second contribution is to show how a dictatorship can manipulate trade policy to maintain its grip on power in the face of permanent world price shocks, thus opening the door to a re-examination of trade policy responses to technology shocks. The model is used to explain an interesting episode of trade policymaking between 1815 and 1846, during which time Britain substantially liberalized trade while Prussia, on the other side of the grain market, significantly increased protectionism.

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  • Zissimos, Ben, 2017. "A theory of trade policy under dictatorship and democratization," Journal of International Economics, Elsevier, vol. 109(C), pages 85-101.
    • Handle: RePEc:eee:inecon:v:109:y:2017:i:c:p:85-101
    DOI: 10.1016/j.jinteco.2017.08.007
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    Cited by:

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    2. Christian Ruckteschler & Adeel Malik & Ferdinand Eib, 2019. "The Politics of Trade Protection: Evidence from an EU-mandated Tari Liberalization in Morocco," CSAE Working Paper Series 2019-12, Centre for the Study of African Economies, University of Oxford.
    3. Evans, Olaniyi, 2019. "The effects of US-China trade war and Trumponomics," MPRA Paper 93682, University Library of Munich, Germany.
    4. Ben Zissimos, 2015. "World Price Shocks, Income, and Democratization," The World Bank Economic Review, World Bank, vol. 29(suppl_1), pages 145-154.
    5. repec:lic:licosd:38717 is not listed on IDEAS
    6. Guimaraes, Bernardo & Sheedy, Kevin D., 2024. "Institutional specialization," Journal of International Economics, Elsevier, vol. 150(C).
    7. Ruckteschler, Christian & Malik, Adeel & Eibl, Ferdinand, 2022. "Politics of trade protection in an autocracy: Evidence from an EU tariff liberalization in Morocco," European Journal of Political Economy, Elsevier, vol. 71(C).
    8. Timini, Jacopo, 2020. "Staying dry on Spanish wine: The rejection of the 1905 Spanish-Italian trade agreement," European Journal of Political Economy, Elsevier, vol. 63(C).
    9. Olper, Alessandro, 2017. "The political economy of trade-related regulatory policy: environment and global value chain," Bio-based and Applied Economics Journal, Italian Association of Agricultural and Applied Economics (AIEAA), vol. 5(3), February.

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    More about this item

    Keywords

    Commitment problem; Efficiency; Fiscal capacity; Institutions; Trade policy;
    All these keywords.

    JEL classification:

    • D30 - Microeconomics - - Distribution - - - General
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State

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