Globalization and Insecurity: Reviewing Some Basic Issues

Michelle R Garfinkel (), Stergios Skaperdas and Constantinos Syropoulos

No 80901, Working Papers from University of California-Irvine, Department of Economics

Abstract: We argue that the costs of domestic and transnational insecurity are large and economically significant and that they may vary with the trade regime of a country. Then, in evaluating trade regimes, the gains from trade need to be weighed against the change in the security costs they induce. Within a simple model of trade, small countries that import a contested resource unambiguously gain from free trade. However, exporters of a contested resource incur additional security costs that are higher than the gains from trade compared to autarky, as long as the international price of the contested resource is not too high. We conclude with a discussion of how domestic and transnational governance could reduce insecurity.

Keywords: Globalization; Trade openness; Property rights; Enforcement; Insecurity (search for similar items in EconPapers)
JEL-codes: D30 D70 D72 D74 F2 F10 (search for similar items in EconPapers)
Date: 2008-07
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Persistent link: http://EconPapers.repec.org/RePEc:irv:wpaper:080901

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