Working Paper: CEPR ID: DP9782
Authors: Simon J. Evenett
Abstract: The resort to discrimination in the Latin American and Caribbean (LAC) region against foreign commercial interests is documented in this paper and compared to aggregate statistics for worldwide policy choice and for a comparator group of developing countries in the Asia Pacific region. LAC protectionism spiked later than in the rest of the world and, on average, the former nations resorted more to traditional protectionist tools than the latter. Within the LAC region, the heavier users of protectionism employed different cocktails of discriminatory policy instruments. An exploratory cross-country analysis of the potential macroeconomic drivers and substitutes for protectionism in LAC was undertaken. During the crisis era, resort to protectionism tended to be greater in nations that cut tariffs more during 2000-7 and that employed less aggressive fiscal stimulus packages once the crisis hit. Exchange rate depreciation appears to have complemented, rather than substituted, for protectionism.
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JEL Codes: No JEL codes provided
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Exchange rate depreciation (F31) | Complemented protectionism (F52) |
| WTO obligations (F13) | Impact likelihood of protectionist measures (F69) |
| Tariff cuts during 2000-2007 (F13) | Greater resort to protectionism during the crisis era (F52) |
| Larger fiscal stimulus packages (E65) | Lower resort to protectionism (F14) |