Trade and expropriation |
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Authors: | Arghya Ghosh Peter E Robertson |
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Institution: | (1) Department of Economics, Hanyang University, 1271 Sa-1 Dong, Ansan, Kyunggi-Do, 426-791, South Korea |
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Abstract: | We examine the effect of international trade on expropriation in a setting where law enforcement is costly. We show that,
in general equilibrium, trade liberalization can reduce expropriation activities and have a first-order effect on the gains
from trade. One interpretation of our results is that unskilled-labor abundant countries facing popular militia or rebel groups
will experience amplified gains from trade, as expropriation levels and cost of enforcement decline with trade liberalization.
However, the model also admits the possibility that globalization causes an increase in crime, particularly for skilled-labor
abundant countries. |
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Keywords: | |
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