Protectionism, dictatorship, and war

by

I am more concerned about economic losses, policy coordination, and other high-probability costs, but Ed Glaeser is making the less-traditional case that protectionism risks increasing the likelihood of war by eroding democracy in developing countries:

Democracy is bolstered by prosperity and damaged by downturns. Since the pioneering work of Martin Lipset 50 years ago, social scientists have tried to understand why democracies and wealth go together. My colleague Robert Barro found that this link exists not because democracies increase prosperity, but because prosperity supports democracy. The appeal of democracy’s enemies increases when democracies, like the Weimar Republic, are unable to deliver economic success.

Trade is crucial for the prosperity of the world’s poorer countries, especially during a downturn. My own research finds little connection between trade and economic growth among rich or middle-income countries, but in the poorest places, where democracies are least stable, a 20 percent drop in the ratio of trade to GDP is associated with per capita incomes growing by 1 percent less per year. Reductions in trade had a devastating impact on Argentina in the 1930s, ending decades of democracy and ushering in a long period of dictatorship and political turmoil.

Free trade brings prosperity to the world’s poorer countries, strengthening their transitions to democracy and making their citizens, and us, safer. But the United States is now contemplating policies that threaten our ability to argue that an economically connected world is stronger and safer.

Advertisements