The Impact of Trade Openness on Institutions

The impact of opening to trade on economic institutions is likely to be multifaceted and depend crucially on country-specific circumstances. In the past decade an active body of research has studied this relationship. This framework makes is especi...

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Main Author:	Levchenko, Andrei A.
Format:	Working Paper
Language:	English en_US
Published:	World Bank, Washington, DC 2017
Subjects:	TRADE BUSINESS AGREEMENT GOVERNANCE IMPACT OPENNESS INSTITUTIONS trade policy trade liberalization politics
Online Access:	http://documents.worldbank.org/curated/en/568761487591720881/World-development-report-2017-the-impact-of-trade-openness-on-institutions http://hdl.handle.net/10986/26214

id	okr-10986-26214
recordtype	oai_dc
spelling	okr-10986-262142021-05-25T08:57:55Z The Impact of Trade Openness on Institutions Levchenko, Andrei A. TRADE BUSINESS AGREEMENT GOVERNANCE IMPACT OPENNESS INSTITUTIONS trade policy trade liberalization politics The impact of opening to trade on economic institutions is likely to be multifaceted and depend crucially on country-specific circumstances. In the past decade an active body of research has studied this relationship. This framework makes is especially clear why international trade opening has the potential to transform institutions. What is needed to effect institutional change is a large and discrete change in the distribution of economic resources in society. These papers draw attention to the distribution of political power as the determinant of how institutions react to trade opening. If “rent seekers” are in power when trade opening occurs, international trade often enables them to increase their rent-seeking behavior and institutions deteriorate. If productive agents are in power, the opposite occurs. Thus, these models point to the possibility of a divergence in institutions as countries open to trade. 2017-03-06T23:16:58Z 2017-03-06T23:16:58Z 2016-05-02 Working Paper http://documents.worldbank.org/curated/en/568761487591720881/World-development-report-2017-the-impact-of-trade-openness-on-institutions http://hdl.handle.net/10986/26214 English en_US World Development Report Background Paper; CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Working Paper
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English en_US
topic	TRADE BUSINESS AGREEMENT GOVERNANCE IMPACT OPENNESS INSTITUTIONS trade policy trade liberalization politics
spellingShingle	TRADE BUSINESS AGREEMENT GOVERNANCE IMPACT OPENNESS INSTITUTIONS trade policy trade liberalization politics Levchenko, Andrei A. The Impact of Trade Openness on Institutions
relation	World Development Report Background Paper;
description	The impact of opening to trade on economic institutions is likely to be multifaceted and depend crucially on country-specific circumstances. In the past decade an active body of research has studied this relationship. This framework makes is especially clear why international trade opening has the potential to transform institutions. What is needed to effect institutional change is a large and discrete change in the distribution of economic resources in society. These papers draw attention to the distribution of political power as the determinant of how institutions react to trade opening. If “rent seekers” are in power when trade opening occurs, international trade often enables them to increase their rent-seeking behavior and institutions deteriorate. If productive agents are in power, the opposite occurs. Thus, these models point to the possibility of a divergence in institutions as countries open to trade.
format	Working Paper
author	Levchenko, Andrei A.
author_facet	Levchenko, Andrei A.
author_sort	Levchenko, Andrei A.
title	The Impact of Trade Openness on Institutions
title_short	The Impact of Trade Openness on Institutions
title_full	The Impact of Trade Openness on Institutions
title_fullStr	The Impact of Trade Openness on Institutions
title_full_unstemmed	The Impact of Trade Openness on Institutions
title_sort	impact of trade openness on institutions
publisher	World Bank, Washington, DC
publishDate	2017
url	http://documents.worldbank.org/curated/en/568761487591720881/World-development-report-2017-the-impact-of-trade-openness-on-institutions http://hdl.handle.net/10986/26214
_version_	1764461161914302464

The Impact of Trade Openness on Institutions

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