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)
Nunn, Nathan, and Daniel Trefler.
"The Structure of Tariffs and Long-Term Growth."
American Economic Journal: Macroeconomics,
Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
Trade Policy; International Trade Organizations
Economic Growth of Open Economies
Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
International Linkages to Development; Role of International Organizations
Development Planning and Policy: Trade Policy; Factor Movement; Foreign Exchange Policy
Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence