Were trade and factor mobility substitutes in history?

Collins, William J; O’Rourke, Kevin; Williamson, Jeffrey G.

doi:10.1017/cbo9780511628405.017

Cited by 47 publications

(22 citation statements)

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“…This may be even more significant given a growing belief among economists that migration complements trade-a view which breaks with traditional beliefs regarding the substitutability of trade for factor mobility (and vice versa) which were for the most part unquestioned from the time of Heckscher-Ohlin, and later, Robert Mundell (1957) (Cf. Collins et al, 1999).…”

Section: Discussionmentioning

confidence: 99%

Security and the Political Economy of International Migration

Rudolph

2003

Am Polit Sci Rev

134

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Given the strong economic gains possible through openness to migration, why do advanced industrial states advocate openness with respect to trade and capital flows but not to international labor mobility? In this article I explain this anomaly using a statist model of political behavior based on perception of threat and its effect on the equilibrium between security's three dimensions-military, material, and societal. Emphasis on one dimension of security over another depends on the type of threat perceived. While external threats prompt an equilibrium sharply skewed toward security's material and military poles, the changing ethnocultural characteristics of increasing international migration flows has generated increasing societal insecurities in receiving states since the mid-1960s. Examining migration trends and border policies in the United States and Europe since 1945, this analysis explores the relationship between external and internal security interests and identifies those elements of international migration that generate perceptions of societal threat. Because societal interests clash with the material objectives of the state, especially given the growing importance of services and skilled labor as well as the economic benefits of an elastic labor supply, policy makers in advanced industrial states increasingly attempt to finesse societal fears while pursuing an overall grand strategy seeking economic maximization through openness. 2 I. Trading States and MigrationRichard Rosecrance (1986) argues that the world has transformed into a system of trading states, where power is increasingly based on Ricardian notions of comparative advantage, factor mobility, and free trade. As gains from trade and interdependence increase, as they have under the past half-century of American hegemony, the use of a military-territorial strategy is a less appealing means of maximizing state power, especially since war has become increasingly costly, complicated, and destructive (Cf. Morgenthau, 1948;Kennedy, 1988;Mueller, 1989;Kupchan, 1994). Proponents of "Washington consensus" neoliberalism argue that liberal trade policies and laissez-faire treatment of international factor flows moves economies toward a Pareto-optimal frontier, one that will create a "rising tide to lift all boats" in both developed and developing nations, though perhaps not evenly (Krugman, 1995;Krugman and Venables, 1995;Krugman and Obstfeld, 1997). Considerable evidence supports the argument that trading state globalization has emerged as a global norm and as a widely accepted basis of state grand strategy since World War II. Since the 1940s, successive rounds of the GATT (now the WTO) have resulted in consistently lower tariff rates that have helped stimulate world trade. From 1980-1998, world trade has grown anywhere from 4.2% to 10.3%, and between 1990-1999 world trade has grown at over three times the rate of global output (World Bank, 1998; WTO, 2000).Moreover, financial transactions, once an adjunct of trade, now tower of trade flows by...

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Section: Discussionmentioning

confidence: 99%

Security and the Political Economy of International Migration

Rudolph

2003

Am Polit Sci Rev

134

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“…For instance, looking at the experience of the New World between 1860and 1930, Collins, O'Rourke, and Williamson (1999 suggest that "policy did not behave as if New World politicians and voters thought trade and immigration were substitutes" (p. 252). In a recent survey, Greenaway and Nelson (2006) argue that "the domestic politics of international trade seems to differ in fundamental ways from the domestic politics of immigration... " (p. 295) and suggest that, while material interests are paramount in explaining the formation of trade policy, non-economic considerations are key to understand migration policy.…”

Section: Introductionmentioning

confidence: 99%

The Political Economy of Trade and Migration: Evidence from the U.S. Congress

et al. 2012

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Over the last decades, the United States has become increasingly integrated in the world economy. Very low trade barriers and comparatively liberal migration policies have made these developments possible. What drove US congressmen to support the recent wave of globalization? While much of the literature has emphasized the differences that exist between the political economy of trade and migration, in this paper we find that important similarities should not be overlooked. In particular, our analysis of congressional voting between 1970 and 2006 suggests that economic drivers that work through the labor market play an important role in shaping representatives' behavior on both types of policies. Representatives from more skilled-labor abundant districts are more likely to support both trade liberalization and a more open stance vis-à-vis unskilled immigration. Still, important systematic differences exist: welfare state considerations and network effects have an impact on the support for immigration liberalization, but not for trade; Democratic lawmakers are systematically more likely to support a more open migration stance than their Republican counterparts, whereas the opposite is true for trade liberalization.JEL classification: F22, J61.

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“…Economies that are open to trade tend also to be open in terms of accepting immigrants: a well-known example is the Netherlands during their Golden Age (Rodrik (1997 ch.2) claims that open economies tend to have a more elastic labor demand and therefore are more eager to accept immigrants). This theme has been elaborated on in the recent pioneering work by Collins et al (1999), who provide empirical support through panel data analysis to a strong complementarity between trade-openness and labor mobility (immigration).…”

Section: Transmission Channelsmentioning

confidence: 96%

Resource-Abundance and Economic Growth in the U.S.

Papyrakis

Gerlagh

2004

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Resource-Abundance and Economic Growth in the U.S. Terms of use: Documents in SummaryIt is a common assumption that regions within the same country converge to approximately the same steady-state income levels. The so-called absolute convergence hypothesis focuses on initial income levels to account for the variability in income growth among regions. Empirical data seem to support the absolute convergence hypothesis for U.S. states, but the data also show that natural resource-abundance is a significant negative determinant of growth. We find that natural resource abundance decreases investment, schooling, openness, and R&D expenditure and increases corruption, and we show that these effects can fully explain the negative effect of natural resource abundance on growth.

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Were trade and factor mobility substitutes in history?

Cited by 47 publications

References 0 publications

Security and the Political Economy of International Migration

Security and the Political Economy of International Migration

The Political Economy of Trade and Migration: Evidence from the U.S. Congress

Resource-Abundance and Economic Growth in the U.S.

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