How Dictators Maintain Power Using International Trade Policy
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Abstract:
We examine how a dictatorship uses trade policy to maintain political stability in response to a world price shock. A country’s comparative advantage will determine the trade policy that it uses for this purpose. If the shock is to an export (import) price then the dictatorship must raise (lower) the corresponding export tax (import tariff) to maintain political stability. We find support for these predictions in the data for dictatorships, but not for established democracies whose behavior is predicted by Grossman and Helpman (1994). We find that trade policy setting behavior by ‘illiberal democracies’ is indistinguishable from that of dictatorships.
Date: 7 November 2017, 14:30 (Tuesday, 5th week, Michaelmas 2017)
Venue: Manor Road Building, Manor Road OX1 3UQ
Venue Details: Seminar Room A
Speaker: Ben Zissimos (University of Exeter)
Part of: International Trade Seminar
Booking required?: Not required
Audience: Members of the University only
Editors: Erin Saunders, Anne Pouliquen