Publication:
Trade, Inequality, and the Political Economy of Institutions

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dc.contributor.authorDo, Quy-Toan
dc.contributor.authorLevchenko, Andrei A.
dc.date.accessioned2012-06-22T15:18:57Z
dc.date.available2012-06-22T15:18:57Z
dc.date.issued2006-02
dc.description.abstractThe authors analyze the relationship between international trade and the quality of economic institutions such as contract enforcement, rule of law, or property rights. The literature on institutions has argued, both empirically and theoretically, that larger firms care less about good institutions and that higher inequality leads to worse institutions. Recent literature on international trade enables the authors to analyze economies with heterogeneous firms, and argue that trade opening leads to a reallocation of production in which large firms grow larger, while small firms become smaller or disappear. Combining these two strands of literature, the authors build a model that has two key features. First, preferences over institutional quality differ across firms and depend on firm size. Second, institutional quality is endogenously determined in a political economy framework. They show that trade opening can worsen institutions when it increases the political power of a small elite of large exporters that prefer to maintain bad institutions. The detrimental effect of trade on institutions is most likely to occur when a small country captures a sufficiently large share of world exports in sectors characterized by economic profits.en
dc.identifierhttp://documents.worldbank.org/curated/en/2006/02/6559639/trade-inequality-political-economy-institutions
dc.identifier.doi10.1596/1813-9450-3836
dc.identifier.urihttps://hdl.handle.net/10986/8778
dc.languageEnglish
dc.publisherWorld Bank, Washington, DC
dc.relation.ispartofseriesPolicy Research Working Paper; No. 3836
dc.rightsCC BY 3.0 IGO
dc.rights.holderWorld Bank
dc.rights.urihttp://creativecommons.org/licenses/by/3.0/igo/
dc.subjectABSOLUTE VALUE
dc.subjectBARRIERS TO ENTRY
dc.subjectBRIBERY
dc.subjectCENTRAL AMERICA
dc.subjectCENTRAL AMERICAN
dc.subjectCOMPETITION EFFECT
dc.subjectCONSUMER PREFERENCES
dc.subjectDEMAND CURVE
dc.subjectDISTRIBUTION OF WEALTH
dc.subjectDOMESTIC DEMAND
dc.subjectDOMESTIC FIRMS
dc.subjectDOMESTIC MARKET
dc.subjectDOMESTIC PRODUCTION
dc.subjectDOMESTIC SALES
dc.subjectECONOMIC PERFORMANCE
dc.subjectECONOMIC SIZE
dc.subjectENTRY BARRIERS
dc.subjectEQUILIBRIUM
dc.subjectEXPORT MARKET
dc.subjectEXPORT MARKETS
dc.subjectEXPORT PROFITS
dc.subjectEXPORTERS
dc.subjectEXPORTING COUNTRIES
dc.subjectEXPORTS
dc.subjectEXTERNAL FINANCE
dc.subjectFACTOR MARKETS
dc.subjectFIXED COST
dc.subjectFIXED COSTS
dc.subjectFOREIGN COMPETITION
dc.subjectFOREIGN FIRMS
dc.subjectFOREIGN MARKET
dc.subjectFOREIGN MARKETS
dc.subjectFOREIGN TRADE
dc.subjectFREE ENTRY
dc.subjectGDP
dc.subjectIMPORT LICENSE
dc.subjectIMPORTS
dc.subjectINCOME
dc.subjectINCREASED COMPETITION
dc.subjectINTERNATIONAL TRADE
dc.subjectMARGINAL BENEFITS
dc.subjectMARGINAL COST
dc.subjectMARGINAL COST OF PRODUCTION
dc.subjectMONOPOLISTIC COMPETITION
dc.subjectNATURAL RESOURCES
dc.subjectOPENNESS
dc.subjectPOLICY RESEARCH
dc.subjectPOLITICAL ECONOMY
dc.subjectPOLITICAL SYSTEMS
dc.subjectPRODUCTIVITY
dc.subjectPROPERTY RIGHTS
dc.subjectQUANTITATIVE RESTRICTIONS
dc.subjectRENT SEEKING
dc.subjectRULE OF LAW
dc.subjectSHARE OF WORLD EXPORTS
dc.subjectSPECIALIZATION
dc.subjectTRADE COSTS
dc.subjectTRADE EXPANSION
dc.subjectTRADE OPENING
dc.subjectTRADE OPENNESS
dc.subjectTRADE POLICY
dc.subjectTRADE REGIME
dc.subjectTRADE REGIMES
dc.subjectTRADING PARTNERS
dc.subjectUTILITY FUNCTION
dc.subjectUTILITY MAXIMIZATION
dc.subjectVOTERS
dc.subjectWAGES
dc.subjectWEALTH
dc.subjectWEST EUROPEAN
dc.subjectWORLD TRADE
dc.titleTrade, Inequality, and the Political Economy of Institutionsen
dspace.entity.typePublication
okr.crossref.titleTrade, Inequality, And The Political Economy Of Institutions
okr.date.doiregistration2025-04-10T10:44:08.039180Z
okr.doctypePublications & Research::Policy Research Working Paper
okr.doctypePublications & Research
okr.docurlhttp://documents.worldbank.org/curated/en/2006/02/6559639/trade-inequality-political-economy-institutions
okr.globalpracticeMacroeconomics and Fiscal Management
okr.globalpracticeGovernance
okr.globalpracticeTrade and Competitiveness
okr.globalpracticeTrade and Competitiveness
okr.guid332531468341099416
okr.identifier.doi10.1596/1813-9450-3836
okr.identifier.externaldocumentum000016406_20060126163148
okr.identifier.internaldocumentum6559639
okr.identifier.reportWPS3836
okr.language.supporteden
okr.pdfurlhttp://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2006/01/26/000016406_20060126163148/Rendered/PDF/wps3836.pdfen
okr.topicInternational Economics and Trade::Trade Policy
okr.topicEconomic Theory and Research
okr.topicLaw and Development::Trade Law
okr.topicInternational Economics and Trade::Trade and Services
okr.topicInternational Economics and Trade::Free Trade
okr.topicInternational Economics and Trade
okr.topicMacroeconomics and Economic Growth
okr.unitDevelopment Research Group (DECRG)
okr.volume1 of 1
relation.isSeriesOfPublication26e071dc-b0bf-409c-b982-df2970295c87
relation.isSeriesOfPublication.latestForDiscovery26e071dc-b0bf-409c-b982-df2970295c87
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