Working Paper: NBER ID: w8999
Authors: John H. Coatsworth; Jeffrey G. Williamson
Abstract: This paper uncovers a fact that has not been well appreciated: tariffs in Latin America were far higher than anywhere else in the century before the Great Depression. This is a surprising fact given that this region has been said to have exploited globalization forces better than most during the pre-1914 belle epoque and for which the Great Depression has always been viewed as a critical policy turning point towards protection and de-linking from the world economy. This paper shows that the explanation cannot lie with output gains from protection, since, while such gains were present in Europe and its non-Latin offshoots, they were not present in Latin America. The paper then explores Latin American tariffs as a revenue source, as a protective device for special interests, and as the result of other political economy struggles. We conclude by asking whether the same pro-protection conditions exist today as those which existed more than a century ago.
Keywords: Latin America; Protectionism; Tariffs; Economic Policy
JEL Codes: F1; N7; O2
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| High Tariffs (F19) | Poor Economic Performance (P17) |
| High Tariffs (F19) | Slow GDP Growth (F62) |
| Political Economy Factors (P19) | Tariff Levels (F14) |
| Tariff Levels (F14) | Economic Growth (O49) |