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Nunn, Nathan, and
Daniel Trefler. 2010. "The Structure of Tariffs and Long-Term Growth."
,
2(4): 158-94.
Show Article Details
DOI: 10.1257/mac.2.4.158
Abstract:We show that the "skill bias" of a country's tariff structure is positively
correlated with long-term per capita GDP growth. Testing for causal mechanisms, we find evidence consistent with the existence of real benefits from tariffs focused in skill-intensive industries. However, this only accounts for a quarter of the total correlation
between skill-biased tariffs and growth. Turning to alternative explanations, we extend the standard Grossman-Helpman "protection-for-
sale" model and show how the skill bias of tariffs can reflect the extent of domestic rent-seeking activities in the economy. We provide evidence that the remaining variation is explained by this endogeneity. (JEL D72, F13, F43, O17, O19, O24, O47)
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Authors:
Nunn, Nathan (Harvard U and BREAD)
Trefler, Daniel (U Toronto and CIFAR)
JEL Classifications:
D72: Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
F13: Trade Policy; International Trade Organizations
F43: Economic Growth of Open Economies
O17: Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
O19: International Linkages to Development; Role of International Organizations
O24: Development Planning and Policy: Trade Policy; Factor Movement; Foreign Exchange Policy
O47: Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
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