Societal Explanations of Trade Politics

Societal Explanations of Trade Politics - 2 March: Societal...

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2 March: Societal explanations of trade politics I. Trade politics Even though trade helps society as a whole, it distributional impact on different groups varies. Which of these groups are most important in trade politics? How do they interact with institutions? Rogowski (1987) looks at how the level of trade changes the coalitions that form within countries. (That is, he’s providing an international economic explanation for a domestic societal outcome.) Starting from the Stolper-Samuelson framework, Rogowski assumes three factors of production: land, labor, and capital. In his basic model, either land or labor is abundant; rich countries are capital-abundant and poor countries are capital-scarce. Since every factor that is abundant (or scarce) has the same interest with respect to international economic policies, abundant (scarce) factors join together. So a rich, sparsely populated country would have class conflict, with land and capital owners joining together to favor trade against the protectionist laboring class. A rich, densely populated country would have urban/rural conflict, with laborers and capitalists banding together against protectionist landowners. Knowing these coalition patterns might illuminate trade preferences and, indirectly, policy outcomes – though of course it is implausible that trade organizes all domestic politics. Oatley presents both factor and sector models of trade policy. The factor model is simply the Heckscher- Ohlin/Stolper-Samuelson model: the abundant factor favors trade, the scarce factor closure.
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This note was uploaded on 08/01/2011 for the course POL S 381 taught by Professor Roberturbatsch during the Fall '09 term at Iowa State.

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Societal Explanations of Trade Politics - 2 March: Societal...

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