A Theory of Trade Policy under Dictatorship and Democratization

Arbeitspapier

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 re- sponses 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.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 6662

Classification and Topics

• Classification: Wirtschaft ; Distribution: General ; Conflict; Conflict Resolution; Alliances; Revolutions ; Neoclassical Models of Trade ; Trade Policy; International Trade Organizations ; Capitalist Systems: Political Economy
• Subject: commitment problem ; efficiency ; fiscal capacity ; institutions ; trade policy

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Zissimos, Benjamin
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2017

Further information

• Handle: http://hdl.handle.net/10419/171126
• Last update: 10.03.2025, 11:42 AM CET