is protectionism on the rise assessing national trade policies during the crisis of 2008 to understand the role of trade policies in the crisis of 2008 this paper constructs the overall trade restrictiveness indices for a wide range of countries using their tariff schedules in 2008 and 2009 the index summarizes the trade policy stance of a country taking into account the share of each good in trade as well as its corresponding import demand elasticity results show that there is no widespread increase in protectionism via tariff policies since the global financial crisis has unfolded while many countries have adjusted tariffs upward on selected products only a handful of countries such as malawi russia argentina turkey and china focus on products that have significant impacts on trade flows the united states and the european union by contrast rely mainly on anti dumping duties to shield domestic industries overall while the rise in tariffs and anti dumping duties in these countries may have jointly caused global trade to drop by as much as us 43 billion during the crisis period it explains less than 2 percent of the collapse in world trade

triple win for trade in renewable resource goods by use of export taxes abstract we challenge the free trade paradigm in particular for developing countries exporting natural resource goods by demonstrating positive economic and environmental effects of an export tax for renewable resource goods the two sector general equilibrium model designed has an open access renewable resource industry and a manufacturing industry the economic environmental and social effects of using an export tax on goods from the open access renewable resource industry are analysed it is demonstrated that the gross domestic product the steady state resource stock and the domestic consumption of both products increase with the resource export tax compared to free trade with no trade taxes

natural resources curse or blessing are natural resources a curse or a blessing the empirical evidence suggests that either outcome is possible this paper surveys a variety of hypotheses and supporting evidence for why some countries benefit and others lose from the presence of natural resources these include that a resource bonanza induces appreciation of the real exchange rate deindustrialization and bad growth prospects and that these adverse effects are more severe in volatile countries with bad institutions and lack of rule of law corruption presidential democracies and underdeveloped financial systems another hypothesis is that a resource boom reinforces rent grabbing and civil conflict especially if institutions are bad induces corruption especially in nondemocratic countries and keeps in place bad policies finally resource rich developing economies seem unable to successfully convert their depleting exhaustible resources into other productive assets the survey also offers some welfare based fiscal rules for harnessing resource windfalls in developed and developing economies

dictators walking the mogadishu line how men become monsters and monsters become men history offers many examples of dictators who worsened their behavior significantly over time like zimbabwe s mugabe as well as dictators who displayed remarkable improvements like rawlings of ghana the authors show that such mutations can result from rational behavior when the dictator s flow use of repression is complementary to his stock of wrongdoings past wrongdoings then perpetuate further wrongdoings and the dictator can unintentionally get trapped in a repressive steady state where he himself suffers from ex post regret this then begs the question why such a dictator would ever choose to do wrong in the first place the authors show that this can be explained from the dictator s uncertainty over his degree of impunity in relation to wrongdoing which induces him to experiment along this dimension this produces a setting where any individual rising to power can end up as either a moderate leader or as a dreaded tyrant since derailment is accidental and accompanied by ex post regret increasing accountability can be in the interest of both the public and the dictator

beyond dollar exchange rate targeting china s crisis era export management regime while considerable attention has been directed towards chinese management of its currency vis a vis the u s dollar the frequent alteration during the recent global economic downturn of rebates on value added taxes paid by exporters on the inputs they have imported has been overlooked in this paper the relevant chinese policy changes are documented and evidence to help gauge the relative importance of this form of intervention presented given the relatively high share of imported value added in chinese exports even apparently small changes in vat export rebates are equivalent to non trivial percentages of domestic value added this finding adds further nuance to our understanding of the impact of supply chains on the resort to protectionism during the crisis

the logic of political violence this paper offers a unified approach for studying political violence whether it emerges as repression or civil war we formulate a model where an incumbent or opposition can use violence to maintain or acquire power to study which political and economic factors drive one sided or two sided violence repression or civil war the model predicts a hierarchy of violence states from peace via repression to civil war and suggests a natural empirical approach exploiting only within country variation in the data we show that violence is associated with shocks that can affect wages and aid as in the theory these effects are only present where political institutions are non cohesive

a theory of political transitions we develop a theory of political transitions inspired by the experiences of western europe and latin america nondemocratic societies are controlled by a rich elite the initially disenfranchised poor can contest power by threatening revolution especially when the opportunity cost is low for example during recessions the threat of revolution may force the elite to democratize democracy may not consolidate because it is redistributive and so gives the elite an incentive to mount a coup highly unequal societies are less likely to consolidate democracy and may end up oscillating between regimes and suffer substantial fiscal volatility

why do some resource abundant countries succeed while others do not on average resource abundant countries have experienced lower growth over the last four decades than their resource poor counterparts but the most interesting aspect of the paradox of plenty is not the average effect of natural resources but its variation for every nigeria or venezuela there is a norway or a botswana why do natural resources induce prosperity in some countries but stagnation in others this paper gives an overview of the dimensions along which resource abundant winners and losers differ in light of this it then discusses different theory models of the resource curse with a particular emphasis on recent developments

the dutch disease and intergenerational welfare governments in resource abundant economies face a tradeoff between transferring wealth to present generations and saving for future generations employing an overlapping generations framework with endogenous growth this article analyses the intergenerational welfare effects of 1 a wealth transfer policy where the entire wealth is transferred to the generations alive at present 2 an income transfer policy where the wealth is saved and the permanent income of the wealth is transferred to all present and future generations forever not surprisingly present generations are unambiguously better off with the wealth transfer policy less trivially however the wealth transfer policy can be associated with higher welfare also for future generations the intuition for this result is that while a wealth transfer depresses growth only in the periods subsequent to the transfer income transfers constitute a permanent drag on growth perhaps counter to the naive intuition the policy of saving the wealth and

a theory of civil conflict and democracy in rentier states the effects of resource rents on the political equilibrium have been studied in two main types of models the first tradition uses models of conflict and studies how resource rents affect the intensity and duration of civil conflict the second tradition uses political economy models where resource rents affect the political equilibrium due to changes in the costs and benefits of buying votes although they provide considerable insight these traditions have little to say about when democracy emerges and about when conflict emerges in this paper by integrating the earlier model traditions we suggest the simplest possible framework we can think of to study the choice between conflict and democracy we show how factors such as resource rents the extent of electoral competition and productivity affect economic and political equilibria

balanced budget redistribution as the outcome of political competition this paper models balanced budget redistribution between socio economic groups as the outcome of electoral competition between two political parties equilibrium is unique in the present model and a sufficient condition for existence is given requiring that there be enough stochastic heterogeneity with respect to party preferences in the electorate the validity of hotelling s principle of minimum differentiation and of director s law are examined under alternative hypotheses concerning administrative costs of redistributions and voter s possibilities both of abstaining from voting and of becoming campaign activists for one of the parties the policy strategy of expected plurality maximization is contrasted with the strategy of maximizing the probability of gaining a plurality incomes are fixed and known so lump sum taxation is feasible however constraints on tax transfer differentiation between individuals are permitted in the analysis

on the form of transfers to special interests an important question in political economy concerns the form of transfers to special interests the chicago view is that political competition leads politicians to make such transfers efficiently the virginia position is that lack of information on the part of voters leads politicians to favor inefficient sneaky methods of redistribution this paper analyzes the form of transfers in a model of political competition in which politicians have incentives to make transfers to special interests it shows that when voters have imperfect information about both the effects of policy and the predispositions of politicians inefficient methods of redistribution may be employed

beggar thy neighbour policies during the crisis era causes constraints and lessons for maintaining open borders since the onset of the global financial crisis in 2007 governments have resorted to beggar thy neighbour measures conforming to previous historical bouts of protectionism the form of discrimination against cross border discrimination changed as well as documenting government attempts to tilt the playing field towards domestic firms this paper discusses the causes and apparent constraints on contemporary protectionism and concludes with a discussion of steps that can be taken to maintain the wide variety of cross border commercial flows seen in the twenty first century

the quality of political institutions and the curse of natural resources we propose a theoretical model to explain empirical regularities related to the curse of natural resources which emphasises the behaviour and incentives of politicians we extend the standard voting model to give voters political control beyond the elections this gives rise to a new restriction that policies should not give rise to a revolution our model clarifies when resource discoveries might lead to revolutions namely in countries with weak institutions it also suggests that for bad political institutions human capital depends negatively on natural resources while for high institutional quality the dependence is reversed this finding is corroborated in cross section regressions

the voracity effect abstract we analyze an economy that lacks a strong legal political institutional infrastructure and is populated by multiple powerful groups powerful groups dynamically interact via a fiscal process that effectively allows open access to the aggregate capital stock in equilibrium this leads to slow economic growth and a voracity effect by which a shock such as a terms of trade windfall perversely generates a more than proportionate increase in fiscal redistribution and reduces growth we also show that a dilution in the concentration of power leads to faster growth and a less procyclical response to shocks jel f43 o10 o23 o40

renewable resources and the gains from trade the brander taylor small open economy model of trade in a renewable resource and other goods is modified to allow for diminishing returns in the other goods sector it is shown that opening up for trade may result in steady state gains from trade even when there is open access to the resource and the country does not specialize fully in resource extraction it is also shown that transition to optimal management with price taking behaviour may result in a welfare loss resources renouvelables et gains en provenance du commerce international l auteur modifie le modele brander taylor de commerce international d une ressource renouvelable et d autres biens dans le cas d une petite economie ouverte afin de tenir compte des rendements decroissants dans le secteur des autres biens on montre que i ouverture au commerce international peut entrainer des gains en provenance de l echange international en regime permanent et ce meme quand l acces a la ressource est ouvert et que le pays ne se specialise pas dans l extraction de la ressource on montre que dans la periode de transition vers un management optimal quand il y a ajustement aux prix de marche il peut y avoir perte de bien etre

natural resources rent seeking and welfare abstract a new and very simple mechanism to explain why natural resource abundance may lower income and welfare is developed in a model with rent seeking a greater amount of natural resources increases the number of entrepreneurs engaged in rent seeking and reduces the number of entrepreneurs running productive firms with a demand externality it is shown that the drop in income as a result of this is higher than the increase in income from the natural resource more natural resources thus lead to lower welfare

fish trade liberalization under 21st century trade agreements the ceta and newfoundland and labrador fish and seafood industry abstract both classical ricardo and neo classical heckscher ohlin theories of international trade assume that free trade results in welfare gains for all involved a more recent literature dedicated to liberalization of trade in renewable resources finds that welfare effects depend on certain factors such as the country s status as importer or exporter the state of the renewable resource stocks and the size of the country on the world market chichilnisky 1993 brander and taylor 1997a emami and johnston 2000 hannesson 2000 or remain theoretically indeterminate and require empirical analysis nielsen 2009 fish trade liberalization is provided in the comprehensive economic and trade agreement ceta concluded by the canadian government in 2013 with the european union eu this new type of 21st century trade agreement challenges both the conventional theory of international trade and renewable resource based sectors of economic activity such as fish and seafood by opening them up to industrial type international competition and integration the paper uses the theoretical framework of ecological economics costanza et al 2015 to demonstrate that the declining newfoundland and labrador nl fish and seafood industry is not ready to participate gainfully in implementation of the ceta it also uses the concept of policy space rodrik 2007 pauwelyn 2008 to recommend some policy changes that can prepare the nl fish and seafood sector for competitive and beneficial participation in the ceta restructuring the fish and seafood sector with a focus on small scale elimination of harmful subsidies and redirecting them to achieve lower costs of operation better trained labor force and more just and sustainable supply marketing networks will make it fit to benefit from the gains from trade and to contribute to a more equitable distribution of the benefits of the fishery to the fishers and local communities

trade liberalisation resource sustainability and welfare the case of east baltic cod abstract recent research has warned that liberalising trade in capture fish products originating from inefficiently managed fisheries might cause over exploitation reduced fish stocks and thereby a reduced steady state of welfare this paper qualifies the warning in a case study of the east baltic cod market by developing an age structured bio economic supply model combined with basic theory of trade between two countries welfare effects of trade liberalisation are identified taking fishing quotas input limitations mesh size regulations and shared ownership of stocks into account it is shown that although liberalising trade in products supplied by such a fishery might cause steady state welfare reductions in the supplier countries these welfare reductions are small compared to the welfare gains from a hypothetical change to optimal management hence the introduction of better fisheries management is much more important than trying to meet potential negative consequences of trade liberalisation since even small improvements in fisheries management may offset the negative effects of trade liberalisation

why did the west extend the franchise democracy inequality and growth in historical perspective during the nineteenth century most western societies extended voting rights a decision that led to unprecedented redistributive programs we argue that these political reforms can be viewed as strategic decisions by the political elite to prevent widespread social unrest and revolution political transition rather than redistribution under existing political institutions occurs because current transfers do not ensure future transfers while the extension of the franchise changes future political equilibria and acts as a commitment to redistribution our theory also offers a novel explanation for the kuznets curve in many western economies during this period with the fall in inequality following redistribution due to democratization i introduction the nineteenth century was a period of fundamental political reform and unprecedented changes in taxation and redistribution britain for example was transformed from an oligarchy run by an elite to a democracy the franchise was extended in 1832 and then again in 1867 and 1884 transferring voting rights to portions of the society with no previous political representation the decades after the political reforms witnessed radical social reforms increased taxation and the extension of education to the masses moreover as noted by kuznets inequality which was previously increasing started to decline during this period the gini coefficient for income inequality in england and wales had risen from 0 400 in 1823 to 0 627 in 1871 but fell to 0 443 in 1901 two key factors in the reduction in inequality were the increase in the proportion of skilled workers williamson 1985 and the redistribution of income toward the poorer segments of the society for example taxes rose from 8 12 percent of national product in 1867 to 18 8 percent by 1927 and the progressivity of the tax system increased substantially see lindert 1989

kleptocracy and divide and rule a model of personal rule many developing countries have suffered under the personal rule of kleptocrats who implement highly inefe cient economic policies expropriate the wealth of their citizens and use the proceeds for their own glorie cation or consumption we argue that the success of kleptocrats rests in part on their ability to use a divide and rule strategy made possible by the weakness of institutions in these societies members of society need to cooperate in order to depose a kleptocrat yet such cooperation may be defused by imposing punitive rates of taxation on any citizen who proposes such a move and redistributing the benee ts to those who need to agree to it thus the collective action problem can be intensie ed by threats which remain off the equilibrium path in equilibrium all are exploited and no one challenges the kleptocrat kleptocratic policies are more likely when foreign aid and rents from natural resources provide rulers with substantial resources to buy off opponents when opposition groups are shortsighted when the average productivity in the economy is low and when there is greater inequality between producer groups because more productive groups are more dife cult to buy off jel o12 h00

more oil less democracy evidence from worldwide crude oil discoveries this article exploits variations in the timing and size of oil discoveries to identify the impact of oil wealth on democracy i find that discovering 100 billion barrels of oil approximately the initial endowment of iraq pushes a country s democracy level almost 20 percentage points below trend after three decades the estimated effect is larger for oilfields with higher quality oil and lower exploration and extraction costs however the estimates become less precise when oil abundance is measured by oil discovery per capita suggesting politicians may care about the level instead of the per capita value of oil wealth

russia s commercial policy 2008 11 modernization crisis and the wto accession this paper examines the commercial policy of russia during 2008 11 a time of global financial crisis which coincided with an announced russian modernization programme in 2008 russia introduced a development strategy to limit its dependence on natural resources however the government relied heavily on this income for the planned modernization programme the falling price of oil in 2008 9 led to a tightened government budget constraint this situation induced russia towards wider use of more traditional instruments of trade policy such as tariff policy as well as an import substitution strategy the creation of the customs union and a pause in the wto accession process russia has been found by the global trade alert gta initiative to be one of the main users of protectionist policies since november 2008 with the oil price recovery from september 2010 russia had been back in the wto accession process on revised terms and conditions the wto ministerial conference in geneva approved the accession package of the russian federation on 16 december 2011 copyright 2012 oxford university press

political foundations of the resource curse in this paper we argue that the political incentives that resource endowments generate are the key to understanding whether or not they are a curse we show 1 politicians tend to over extract natural resources relative to the efficient extraction path because they discount the future too much and 2 resource booms improve the efficiency of the extraction path however 3 resource booms by raising the value of being in power and by providing politicians with more resources which they can use to influence the outcome of elections increase resource misallocation in the rest of the economy 4 the overall impact of resource booms on the economy depends critically on institutions since these determine the extent to which political incentives map into policy outcomes countries with institutions that promote accountability and state competence will tend to benefit from resource booms since these institutions ameliorate the perverse political incentives that such booms create countries without such institutions however may suffer from a resource curse

economic backwardness in political perspective government policies and institutions shape economic incentives and via this channel have a first order impact on economic development why then do many societies adopt policies that discourage investment and maintain institutions that cause economic backwardness perhaps politically powerful groups elites are not in favor of economic growth but why it would appear that economic growth would provide more resources for these groups to take over or tax increasing their economic returns so why don t powerful groups always support economic development in this paper we develop a theory of inefficient government policies and institutions all else equal politically powerful groups would welcome superior institutions and technologies but in practice all else is not equal because superior institutions and technologies may reduce their political power and make it more likely that they will be replaced at the center of our theory is therefore the idea that changes in institutions or the introduction of new technologies often create turbulence eroding the political advantages and future economic rents of incumbent elites alternatively new technologies may enrich competing groups increasing their threat to incumbents these considerations make politically powerful groups fear losing power and oppose economic and political change even when such change will benefit society as a whole to understand the mechanism at work and its potential applications consider a concrete example industrialization in the nineteenth century bairoch 1982 estimates that between 1830 and 1913 world manufacturing output increased by a factor of 5 see table 1 panel a nevertheless this process was highly uneven across regions and countries bairoch also calculates that over the same period manufacturing output in developed countries europe and north america increasedbyafactorofover10 whereasitdeclinedinthe third world among developed countries there were

crisis era protectionism and the multilateral governance of trade an assessment this paper examines the multilateral governance of trade along with the prospects for its meaningful reform in the light of recent crisis era discrimination against the many types of cross border commerce prior episodes of protectionism provide a useful benchmark the findings are not optimistic the current set of multilateral rules is incomplete has weak incentives for compliance and can be readily circumvented only a far reaching revision of these rules could induce more restraint

the long run effects of oil wealth on development evidence from petroleum geology we estimate the long run effects of oil wealth on development by exploiting spatial variation in sedimentary basins areas where petroleum can potentially form instrumental variables estimates indicate that oil production impedes democracy and fiscal capacity development increases corruption and raises gdp per capita without significantly harming the non resource sectors of the economy we find no evidence that oil production increases internal armed conflict coup attempts or political purges in several specifications failure to account for endogeneity leads to substantial underestimation of the adverse effects of oil suggesting that countries with higher quality political institutions and greater fiscal capacity disproportionately select into oil production