the democratic political economy of progressive income taxation why do both left and right political parties typically propose progressive income taxation schemes in political competition analysis of this problem has been hindered by the two dimensionality of the issue space to give parties a choice over a domain that contains both progressive and regressive income tax policies requires an issue space that is at least two dimensional nash equilibrium in pure strategies of the standard two party game whose players have complete preferences over a two dimensional policy space generically fails to exist i introduce a new equilibrium concept for political games based on the fact of factional conflict within parties each party is supposed to consist of reformists militants and opportunists each faction has a complete preference order on policy space but together they can only agree on a partial order nash equilibria of the two party game where the policy space consists of all quadratic income tax functions and each party is represented by its partial order exist and it is shown that in such equilibria both parties propose progressive income taxation

candidate reputations and the incumbency effect abstract a major shortcoming of the classical median voter model is that its central prediction convergence of platforms to the median voter s ideal is seldom observed one reason is that the classical model neglects the importance of voter expectations as a determinant of votes here we associate voters expectations about candidates with past as well as current candidate pronouncements and assume that incumbents whose actions are consistent with their reputations are perceived as less risky than challengers in equilibrium candidates choose distinct platforms typically neither adopts the median voter s ideal point either candidate may win depending on how well the incumbent s reputation reflects current voter tastes and how relatively risky the electorate perceives the challenger to be

the geographical dimension of the development effects of natural resources we study the contribution of natural resource intensity to long term development along different dimensions per capita income institutional quality and education we allow natural resources to affect these dimensions differently in different regions of the world the evidence suggests that natural resources are generally a positive driver of development but in sub saharan africa ssa their contribution is almost negligible if not even negative we explain these cross regional differences with the fact that in ssa more than anywhere else large resource endowments are combined with a particularly bad disease environment some historical evidence and formal econometric results support this hypothesis

fairness self interest and the politics of the progressive income tax all advanced democracies have adopted income taxes with considerable progression in marginal tax rates to explain this we examine the nature of individual and collective preferences over alternative tax schedules in the context of a simple two sector model we first consider the case of altruistic or sociotropic citizens who view the income tax as a means of achieving a fairer or more egalitarian distribution of income we show that greater marginal rate progressivity may well be less fair that a fairest tax however defined is always a linear or flat rate schedule in which all incomes are taxed at the same marginal rate and that with a purely sociotropic electorate there exists a flat rate schedule which is a majority equilibrium we then show that with self interested voters who seek to minimize their own tax burdens greater marginal rate progression may well be preferred by middle and upper income voters that for middle income citizens the optimal schedule is a sharply progressive one and that within the set of individually optimal schedules there exists a majority equilibrium which is a progressive schedule which minimizes the burden on median income or middle class citizens at the expense of lower and upper income taxpayers

representative democracy and marginal rate progressive income taxation abstract this paper develops a political economy model that is consistent with the fact that democracies have a preference for increasing marginal tax rates on income we present a model in which there is an exogenous set of political parties with preferences over the set of admissible tax schedules this set contains virtually any increasing and piecewise linear continuous function each party decides whether or not to present a candidate for election there is a fixed cost of running the elected candidate implements one of her preferred tax policies our main results provide conditions under which a strong nash equilibrium exists and a tax schedule with increasing marginal tax rates is implemented in some nash equilibria and in any strong nash equilibrium

destination competitiveness challenges a ugandan perspective this paper analyses and explicates the limiting role of multiple and varied challenges in the realisation of a country s tourism potential using uganda as an exemplar two objectives are pursued one that entails an assessment of the competitive potential of uganda s tourism and another an explication of the challenges that limit its full realisation the study is based on secondary data supplemented through in depth interviews with some key informants in ugandan tourism the paper identifies disparities in destination product and demand patterns inadequate marketing budgets in the face of a persistent negative image and inadequate institutional and managerial capabilities as key challenges it concludes that the complexity of challenges faced by uganda a non traditional destination makes the notion of competitive advantage used in conventional strategy and tourism destinations competitiveness literature seem inappropriate this has implications for tourism development and management in such destinations with particular focus on resource allocation and utilisation

economics postcolonial theory and the problem of culture institutional analysis and hybridity postcolonial theory has not yet made an impact in economics this may be explained by the different treatment of culture in each field in postcolonial theory culture serves as a central analytical category in economics despite increased attention in recent history general approaches to culture continue to underestimate its role in economic behaviour and decision making borrowing some insights from postcolonial theory this paper calls for further attention to culture in economics it is argued that such a turn improves current understanding of contemporary economic phenomena and allows subaltern cultures currently theorised as less developed to equally participate in the global construction of social meaning and economic well being it is further argued that incorporating the postcolonial idea of hybridity into the institutional economic approach holds the most promise for theorising contemporary postcolonial economies this argument is illustrated by examining some hybrid economic patterns within africa copyright the author 2009 published by oxford university press on behalf of the cambridge political economy society all rights reserved oxford university press

neopatrimonialism and the political economy of economic performance in africa critical reflections during the past two decades neopatrimonialism has become the convenient all purpose and ubiquitous moniker for african governance the school of thought behind this research program which the author refers to as the neopatrimonialism school has produced an impressive literature on africa its analysis informs policymakers and its language permeates media reportage on african states while neopatrimonialism has long been a focus of development studies in recent times it has assumed politically and economically exigent status the school identifies causal links between neopatrimonialism and economic performance and makes predictions drawing from what is referred to as the logic of neopatrimonialism neopatrimonialism is said to account for trade policies hyperinflation economic stagnation low investment in infrastructure urban bias andultimately the lack of economic development in africa this article examines the empirical basis of predictions and policy prescriptions it argues that while descriptive of the social practices of the states and individuals that occupy different positions within african societies the concept of neopatrimonialism has little analytical content and no predictive value with respect to economic policy and performance

rough and lonely road to prosperity a reexamination of the sources of growth in africa using bayesian model averaging this paper takes a fresh look at africa s growth experience by using the bayesian model averaging bma methodology bma enables us to consider a large number of potential explanatory variables and sort out which of these variable can effectively explain africa s growth experience posterior coefficient estimates reveal that key engines of growth in africa are substantially different from those in the rest of the world more precisely it is shown that mining primary exports and initial primary education exerted differential effect on african growth these results are examined in relation to the existing literature copyright 2008 john wiley sons ltd

vulnerability and resilience determinants of under five mortality changes in zambia summary in zambia under five mortality declined from 1958 to 1975 rose from 1975 to 1992 before resuming its decline from 1992 to 2001 the study investigates the economic political and epidemiologic determinants of these changes the rise in mortality could be explained by an economic downturn declining income per capita resulting from lower copper prices on international markets and decreasing production and its numerous consequences and to a lesser extent by emerging diseases increasing mortality from hiv aids and resistant malaria however mortality decline could resume as a result of building social and health capital in particular health personnel and favorable health policies

a welfare comparison of private and public monopoly abstract the cost function of a monopoly is c q k q where is unknown to the regulator we evaluate various ownership and regulation regimes in terms of social welfare determined by both the amount of total surplus and its distribution maximal welfare is achieved by the regulated public firm when its bias is pro consumer and also when it is pro worker and is low enough we compare an unregulated public firm with a private one regulated a la loeb magat baron myerson and characterize the frontier in parameter space where one or the other dominates

the paradox of state retrenchment in sub saharan africa the micro level experience of public social service provision summary over the past 30 years in africa neoliberal economic reform has meant a major retrenchment of the state provision of health and education with paradoxical local effects based on an analysis of 2005 afrobarometer data the study finds that the rural poor are more likely to use public schools and clinics than the urban better off the data suggest that a two tiered social service system now exists across many african countries where the rural poor may have little choice but to use public social services while the urban better off choose to pay for private alternatives the author argues that concerns about ensuring absolute levels of access have obscured attention to the micro experience and quality of social service delivery

political manipulation of a public firm s objective function abstract in the context of a government owned public firm that competes with a private firm this paper demonstrates how the government can maximize its true objective by assigning the public firm a different objective function interestingly this assigned objective function need bear no resemblance to the actual objective being sought enabling the government to disguise a politically unpopular agenda and or outside influence

economic and security consequences of supreme values islamic societies have in contemporary times lagged western societies in income growth and human development indicators the supreme values of radical islam further de prioritize economic achievement and impose self deprivation on own populations this paper investigates the reasons for economic outcomes under islam contemporary illustrations are also provided of the self deprivation predicted from pursuit of the supreme value objectives of radical islam the self deprivation is placed in a rent seeking context

did colonization matter for growth an empirical exploration into the historical causes of africa s underdevelopment we investigate the impact of 20th century european colonization on growth we 5nd that colonial heritage as measured by the identity of the metropolitan ruler and by the degree of economic penetration matters for the heterogeneity of growth performances in africa colonial indicators are correlated with economic and sociopolitical variables that are commonly employed to explain growth and there are growth gains from decolonization colonial indicators also add signi5cant explanatory power to worldwide growth regressions and are correlated with the sub saharan africa and the latin america dummies c

temporal and spatial modelling of tropical deforestation a survival analysis linking satellite and household survey data we estimate a spatially explicit model of the forest clearance process among smallholder farmers in an agricultural frontier of southern mexico our analysis takes as its point of departure a simple utility maximising model that suggests many possible determinants of deforestation in an economic environment characterised by missing or thin markets hypotheses from the model are tested on a data set that combines a time series of satellite imagery with data collected from a survey of farm households whose agricultural plots were geo referenced using a global positioning system gps we implement a survival analysis to identify the effect of household level explanatory variables on the probability of deforestation this approach allows us to introduce a measure of the time until clearance as a covariate thereby affording a control for the effect of potentially important explanatory variables that vary through time but are not directly observable in addition to identifying several variables relevant for policy analysis including household demographics proximity to roads and government provision of agricultural support model results suggest that the deforestation process is characterised by non linear duration dependence with the probability of forest clearance first decreasing and then increasing with the passage of time

price equilibrium and willingness to pay in a vertically differentiated mixed duopoly in the framework of a vertically differentiated mixed duopoly with uncovered market and zero costs we study the existence of a price equilibrium when a welfare maximizing public firm producing low quality goods competes against a profit maximizing private firm producing high quality goods we show that a price equilibrium exists if the quality spectrum is wide enough vis a vis a measure of the convexity of the distribution of the consumers willingness to pay and that such equilibrium is unique if this sufficient condition is tightened logconcavity of the income distribution is inconsistent with the existence of equilibrium

stochastic convergence amongst mexican states carrion i silvestre j l and german soto v 2007 stochastic convergence amongst mexican states regional studies 41 531 541 the paper investigates the convergence process experienced by the mexican states in the period 1940 2001 the analysis indicates that misleading conclusions can be obtained if the presence of structural breaks is not taken into account when testing for the presence of stochastic convergence thus after allowing for structural breaks evidence in favour of convergence in terms of real per capita gdp is found using both unit root and co integration tests empirical evidence shows that economic convergence has changed over time with mixed effects although changes were toward convergence in the majority of cases consistent with stochastic convergence carrion i silvestre j l et german soto v 2007 la convergence stochastique parmi les etats au mexique regional studies 41 531 541 cet article cherche a examiner le processus de convergence aux etats mexicains entre 1940 et

multiple breaks terms of trade shocks and the unit root hypothesis for african per capita real gdp summary this paper presents an investigation of the unit root hypothesis for per capita real gdp series in 46 african countries from maddison 2003 over the period spreading during 1950 and 2001 toward this end we employ highly flexible panel techniques which incorporate multiple mean and slope shifts in the output series our findings are clearly supportive of regime wise trend stationarity in output after 1 allowing for cross dependence and multiple breaks and 2 removing four countries that exert undue influence on the whole panel remarkably our main results hold true for alternative per capita real gdp proxies retrieved from the penn world table 6 2 as well as for different country groups constructed on the basis of the country s participation in regional integration processes interestingly the timing of the breaks broadly coincides with terms of trade shocks associated with large fluctuations in the price of primary commodities based on our results we draw some policy prescriptions that point to the need for managing adequately terms of trade booms and busts to avoid large swings in africa s aggregate output

understanding preferences for income redistribution abstract recent research suggests that income redistribution preferences vary across identity groups we employ statistical learning methods that emphasize pattern recognition classification and regression trees cart and random forests randomforests to uncover what these groups are using data from the general social survey we find that out of a large set of identity markers only race gender age and socioeconomic class are important classifiers for income redistribution preferences further the uncovered identity groupings are characterized by complex patterns of interaction amongst these salient classifiers we explore the extent to which existing theories of income redistribution can explain our results but conclude that current approaches do not fully explain the findings

agricultural policy market barriers and deforestation the case of mexico s southern yucatan summary this paper examines the linkages between agricultural policies and deforestation in a development frontier of southern mexico focusing on support programs targeted at buffering farmers from structural reforms we argue that local barriers to market participation condition the responsiveness of farmers to program incentives thereby constituting a key channel through which agricultural policies impact the environment an econometric model parameterizes the influence of two programs procampo and alianza para el campo on cultivation consistent with an economic environment characterized by market barriers results suggest that program support even when decoupled from production decisions significantly determines land use and deforestation

aid policies and growth the authors of this paper use a new database on foreign aid to examine the relationships among foreign aid economic policies and growth of per capita gdp in panel growth regressions for 56 developing countries and 6 four year periods 1970 93 they find that the policies that have a great effect on growth are those related to fiscal surplus inflation and trade openness they construct an index for those three policies and have that index interact with foreign aid they have instruments for both aid and aid interacting with policies they find that aid has a positive impact on growth in developing countries with good fiscal monetary and trade policies in the presence of poor policies aid has no positive effect on growth this result is robust in a variety of specifications which include or exclude middle income countries include or exclude outliers and treat policies as exogenous or endogenous they examine the determinants of policy and find no evidence that aid has systematically affected policies either for good or for ill they estimate an aid allocation equation and show that any tendency for aid to reward good policies has been overwhelmed by donors pursuit of their own strategic interests in a counterfactual they reallocate aid reduce the role of donor interests and increasing the importance of policy such a reallocation would have a large positive effect on developing countries growth rates

economics and english language growth in economic perspective and the lord said look they are one people and they have all one language and this is only the beginning of what they will do nothing that they propose to do will now be impossible for them come let us go down and confuse their language there so that they will not understand one another s speech genesis 11 6 7 the bond of language is perhaps the strongest and most lasting that can unite men tocqueville 1835 1840 2000 p 29 i am a friend to neology it is the only way to give to a language copiousness and euphony without it we should still be held to the vocabulary of alfred or of ulphilas and held to their science also thomas jefferson to john adams august 15 1820 emphasis in the original polonius what do you read my lord hamlet words words words act ii 2 1 introductionlanguage use is a distinguishing characteristic of homo sapiens 1 human beings are programmed to construct hundreds of thousands of words from a comparative handful of sounds a phenomenon known to linguists as duality pinker 1996 from a purely economic perspective language can be seen as an exchange facilitating institution just as important in its own right as other more deeply studied underpinnings of orderly markets such as clearly defined property rights and rules for enforcing contracts exchange of course is not the only economic function of language since language can be used for many purposes including coercion arrest that man the paradigm of exchange has nonetheless proven analytically fruitful and indeed has been applied by economists to help explain the functioning of political markets patterns of trade within the family crime drug addiction and many other seemingly noneconomic aspects of human behavior e g becker 1976 1996 becker and murphy 2001 viewing language as an exchange friendly institution locates the study of its growth and impact squarely within the singular perspective of economic science 2 this analytical framework in no way diminishes the importance of more traditional approaches to the subject it simply calls attention to an emerging literature in which economists have begun colonizing the study of language 3language as friedrich von hayek 1960 stressed repeatedly is an example of spontaneous order in other words language was not created deliberately it evolved in the absence of human plan or conscious design viewed in that perspective the evolution of language has much in common with that of another exchange friendly institution money both of these institutions emerged spontaneously as rational individuals searched for mutually acceptable ways of communicating and of acting on their natural propensities to truck barter and exchange one thing for another smith 1776 1976 bk i chap ii p 17 over time independent responses to novel situations produced words and rules for their use that facilitated communication in much the same way that attempts to cope with the rarity of dual coincidences of wants led to the selection of one commodity as money as hayek 1988 p 106 puts it trade migration and the increase and mixture of population must not only have opened people s eyes but also loosened their tongues it was not simply that tradesmen inevitably encountered and sometimes mastered foreign languages during their travels but that this must have forced them also to ponder the different connotations of key words if only to avoid either affronting their hosts or misunderstanding the terms of agreements to exchange and thereby come to know new and different views about the most basic matters 4 what materialized over millennia as a result of competition among alternative media of exchange and means of communication were efficient monies and languages in modern parlance language is the archetypal network good i

wealth risk and activity choice cattle in western tanzania abstract imperfect credit markets force households to use their savings for investment profitable activities often require lumpy investments limiting entry by poorer households resulting in increasing welfare differences in tanzania cattle are a profitable but lumpy investment and a liquid asset for consumption smoothing richer households own substantial cattle herds while poorer households specialize in low return low risk activities a dynamic programming model and simulations are presented to analyze entry into asset accumulation under income risk the evidence suggests that households with lower endowments are less likely to own cattle and returns to their endowments are lower

trends in rainfall and economic growth in africa a neglected cause of the african growth tragedy abstract we examine the role of rainfall trends in poor growth performance of sub saharan african nations relative to other developing countries using a new cross country panel climatic data set in an empirical economic growth framework our results show that rainfall has been a significant determinant of poor economic growth for african nations but not for other countries depending on the benchmark measure of potential rainfall we estimate that the direct impact under the scenario of no decline in rainfall would have resulted in a reduction of between around 15 and 40 of today s gap in african gdp per capita relative to the rest of the developing world

partial privatization in mixed duopoly abstract we investigate a quantity setting duopoly involving a private firm and a privatized firm jointly owned by the public and private sectors the private firm maximizes profits while the privatized firm takes both profits and social welfare into consideration we consider how many shares the government should hold in the privatized firm we find that neither full privatization the government does not hold any shares nor full nationalization the government holds all of the shares is optimal under moderate conditions

fighting city hall entry deterrence and technology upgrades in cable tv markets this article investigates how private firms respond to potential entry from public firms this paper uses a data set of over 3 000 u s cable tv systems to present evidence consistent with entry deterrence incumbent cable tv firms upgrade faster when located in markets with a potential municipal entrant however the same systems are then slower to offer new products enabled by the upgrade suggesting upgrades in these markets occur for strategic reasons incumbent cable systems also upgrade faster in response to municipal entry threats than to private entry threats understanding how private firms respond to potential entry from public firms is especially important in light of recent u s government entry into several industries this paper was accepted by bruno cassiman business strategy

explaining african economic performance africa has had slow growth and a massive exodus of capital in many respects it has been the most capital hostile region we review and interpret the aggregate level and microeconomic literatures to identify the key explanations for this performance there is a reasonable correspondence of the two sets of evidence pointing to four factors as being important these are a lack of openness to international trade a high risk environment a low level of social capital and poor infrastructure these problems are to a substantial extent attributable to government behaviour and the paper includes a review of the political economy literature which addresses that behaviour

why has africa grown slowly we distinguish between policy and destiny explanations of africa s slow growth during the past three decades policies were poor high export taxation and inefficient public service delivery and destiny was adverse landlocked tropical locations and terms of trade deterioration during the 1990s africa s economic policies improved although with considerable variation both between countries and between policies trade and exchange rate policies improved much more than service delivery thus the differing explanations of past slow growth imply different predictions for growth in the coming decade we argue that poor public economic services are likely to be the binding constraint

mixed oligopoly equilibria when firms objectives are endogenous abstract we study a vertically differentiated market where two firms simultaneously choose the quality and price of the good they sell and where consumers may also care for the average quality of the goods supplied firms are composed of two factions whose objectives differ one is maximizing profit while the other maximizes revenues the equilibrium concept we model called firm unanimity nash equilibrium fune corresponds to the nash equilibrium between firms when there is efficient bargaining between the two factions inside both firms we first show that such equilibria are inefficient with both firms underproviding quality we then assume that the government takes a participation in one firm which introduces a third faction bent on welfare maximization in that firm we study the characteristics of equilibria as a function of the bargaining weight of the welfare maximizing faction we show that equilibrium welfare increases with this bargaining weight especially if consumers care a lot for the average quality of the goods provided

capacity investment timing by start ups and established firms in new markets we analyze the competitive capacity investment timing decisions of both established firms and start ups entering new markets which have a high degree of demand uncertainty firms may invest in capacity early when uncertainty is high or late when uncertainty has been resolved possibly at different costs established firms choose an investment timing and capacity level to maximize expected profits whereas start ups make those choices to maximize the probability of survival when a start up competes against an established firm we find that when demand uncertainty is high and costs do not decline too severely over time the start up takes a leadership role and invests first in capacity whereas the established firm follows by contrast when two established firms compete in an otherwise identical game both firms invest late we conclude that the threat of firm failure significantly impacts the dynamics of competition involving start ups this paper was accepted by yossi aviv operations management

drivers of structural transformation the case of the manufacturing sector in africa abstract this paper analyzes the driving factors of manufacturing development in africa using the system gmm technique with four year average panel data over the period 1995 2014 including 53 african countries the paper finds four main results 1 there is a u shaped relationship between the manufacturing share of gdp and per capita gdp 2 exchange rate depreciation stimulates africa s manufacturing sector 3 good governance especially a low level of corruption and better government effectiveness contribute to africa s manufacturing development 4 the size of domestic market positively affects the manufacturing share of gdp on the other hand the paper finds no significant effects of fdi and urbanization on manufacturing development the implication of these findings is that improving the level of competitiveness expanding the size of domestic market combating corruption as well as improving government effectiveness are key for africa s manufacturing sector development moreover the u shaped relationship between the manufacturing share of gdp and per capita gdp implies that african countries should not expect industrialization to automatically happen with income increase but rather they should proactively tackle key obstacles to the development of the manufacturing sector

diversity and redistribution abstract in this paper we analyze the interaction of income and preference heterogeneity in a political economy framework we ask whether the presence of preference heterogeneity arising for example from different ethnic groups or geographic locations affects the ability of the poor to extract resources from the rich we study the equilibrium of a game in which coalitions of individuals form parties parties propose platforms and all individuals vote with the winning policy chosen by plurality political parties are restricted to offering platforms that are credible in that they belong to the pareto set of their members the platforms specify the values of two policy tools a general redistributive tax which is lump sum rebated or used to fund a general public good and a series of taxes whose revenue is used to fund specific targeted goods tailored to particular preferences or localities our analysis demonstrates that taste conflict first dilutes but later reinforces class interests when the degree of taste diversity is low the equilibrium policy is characterized by some amount of general income redistribution and some targeted transfers as taste diversity increases in society the set of equilibrium policies becomes more and more tilted towards special interest groups and against general redistribution as diversity increases further however the only policy that can emerge supports exclusively general redistribution

political competition and mirrleesian income taxation a first pass we study downsian competition in a mirrleesian model of income taxation the competing politicians may dier in competence if politicians engage in vote share maximization the less competent politician s policy proposals are attractive to the minority of rich agents whereas those of the competent politician are attractive to the majority of poor agents the less competent politician wins with positive probability which gives rise to a political failure in the sense of besley and coate 1998 political failures are avoided if politicians maximize winning probabilities nevertheless the two equilibria cannot be pareto ranked the minority may be better o under vote share maximization

policy objectives and performance in a mixed market with bargaining abstract we analyse a mixed duopoly in which wages and salaries are determined by nash bargaining and where the public firm s unit costs depend on its objectives because of constant returns to scale welfare maximisation without restriction would eliminate or significantly weaken the private firm therefore we focus on constrained welfare maximisation in which case unit costs are normally higher in the public firm on the other hand the private firm may even earn more than in a monopoly if the public firm maximises profits or if the constraint offers too much protection

demographic and economic pressure on emigration out of africa two of the main forces driving european emigration in the late nineteenth century were real wage gaps between sending and receiving regions and demographic booms in the low wage sending regions our new estimates of net migration for the countries of sub saharan africa show that exactly the same forces driving african across border migration are at work today the results suggest that rapid growth in the cohort of potential young emigrants population pressure on the resource base and slow economic growth are likely to intensify the pressure for migration out of africa and into high wage oecd countries over the next two decades

duopoly and quality standards abstract in the absence of sunk costs a low quality producer benefits from a mildly restrictive quality standard whereas a high quality producer suffers from it consumers welfare increases if the firm producing the higher quality does not increase its quality significantly in response to the increase in quality by its rival a sufficiently severe standard causes exit from the industry when there are no sunk cost the high quality producer exits first

terms of trade shocks and economic performance 1870 1940 prebisch and singer revisited debate over trends in the terms of trade between primary commodities and manufactures their causes and their impact has dominated the literature for more than a century classical economists claimed that the terms of trade of primary commodities should improve since land and natural resources are always in inelastic supply following the great depression a new view emerged what came to be known as the prebisch singer thesis was instead that the terms of trade for primary products had deteriorated up to the 1950s the subsequent literature has almost exclusively and obsessively asked whether a deterioration has actually taken place over the 130 years following 1870 nowhere in this literature has the impact of these terms of trade shocks on long run growth been assessed although it is certainly full of lively speculation and debate this paper fills part of this empirical gap by constructing a country specific panel data base 1870 1940 by documenting terms of trade trends by country and region and finally by estimating the impact of the price shocks on long run economic performance we find the impact to have been asymmetric between center and periphery this abstract was borrowed from another version of this item