تجارت، نابرابری و اقتصاد سیاسی موسسات

This paper investigates the relationship between international trade and the quality of economic institutions. We model institutions as fixed costs of entry, in a framework that has two key features. First, preferences over entry costs differ across firms and depend on firm size. Larger firms prefer to set higher costs of entry, in order to reduce competition. Second, these costs are endogenously determined in a political economy equilibrium. Trade opening can lead to higher entry costs when it changes the political power in favor of a small elite of large exporters, who in turn prefer to install high entry barriers.

Economic institutions, such as quality of contract enforcement, property rights, rule of law, and the like, are increasingly viewed as key determinants of economic performance (Acemoglu, Johnson, and Robinson [1]). While it has been established that institutions are important in explaining income differences across countries, what in turn explains those institutional differences is still an open question, both theoretically and empirically.

What can we say about how increased exposure to trade changes a country’s institutional quality? Country experiences with trade opening are quite diverse. In some cases, opening led to a diversified economy in which no firm had the power to subvert institutions, while in others trade led to the emergence of a small elite of producers, which captured all of the political influence and installed the kinds of institutions that maximized their profits.