Working Paper: NBER ID: w9401
Authors: Michael A. Clemens; Jeffrey G. Williamson
Abstract: Despite an enormous literature that has analyzed the comparative experiences of Latin America and Asia in post-World War II trade policy, almost no attention has been paid to the comparative experience prior to the wars. Even a cursory look at the best available empirical evidence reveals tremendous contrasts between the two regions. Latin America had the highest tariff barriers on earth before 1914; Asia had the lowest. Protected Latin America's belle ‚poque also boasted some of the most explosive growth performance on earth, while Asia registered some of the worst. What brought the two regions to the opposite ends of the tariff policy spectrum? And why are these quantum differences in economic performance so at odds with postwar conventional wisdom? We begin by describing a novel tariff database we have constructed from largely original sources. We explore the impact of colonial rule and unequal treaties' on Asian tariffs, as well as the impact of geography and political economy on Latin American tariffs. Limits to tariff policy autonomy explain one third of the vast difference between the two regions' tariffs before 1914; differences in the extent and structure of internal markets as well as the world tariff environment explain much of the rest. We conclude with an agenda for the future.
Keywords: No keywords provided
JEL Codes: F1; N7; O1
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| colonial rule and unequal treaties (F54) | lower tariffs in Asia (F15) |
| geographical and political economic context in Latin America (O54) | high tariff barriers (F13) |
| limits to tariff policy autonomy (F13) | differences in tariffs (F14) |
| internal market structures and global tariff environment (L11) | differences in tariffs (F14) |
| higher tariffs in Latin America (N96) | explosive economic growth (O53) |