Free Trade Agreements and the Consolidation of Democracy
Xuepeng Liu and Emanuel Ornelas
American Economic Journal: Macroeconomics, Vol. 6, No. 2 (April 2014), pp. 29-70
Overview
Trade protection for weak domestic producers encourages rent-seeking and inefficiency. Free trade agreements (FTAs) can bind the hands of incumbent politicians and serve as commitment devices to destroy future protectionist rents. Such rents are attractive to autocratic groups that stand to benefit for a long time; FTAs can reduce their incentives to seek power in unstable or fledgling democracies, which can then consolidate. This ground-breaking paper was published in the American Economic Journal and presented at many prestigious academic conferences, such as the annual meeting of the American Economic Association (AEA), and top universities, such as MIT and Princeton. It has been cited frequently and was highlighted on the AEA website, the World Trade Organization (WTO) website, and the leading academic blog VoxEU.org (18,713 reads as of December 2017). The authors have received many emails about it from other economists, commentators, and policymakers around the world. For example, a Chief Economist of the World Bank reached out to them for comments after the Arab Spring on how FTAs might help to promote peace and strengthen democracy in the region. The paper was then distributed through regional offices in the Middle East and North Africa.
12 | Journal Publications - Outstanding Impact
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