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Trade Liberalization and Culture

Steven Suranovic () and Winthrop Robert ()
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Winthrop Robert: US Department of the Interior, Bureau of Land Management, Washington, DC, USA

Global Economy Journal, 2014, vol. 14, issue 1, 22

Abstract: This paper addresses the effect of international trade on cultural outcomes from both economic and anthropological perspectives. Definitions of culture are informed by anthropology and then incorporated into a standard economic trade models in two distinct ways. In the “cultural affinity from work” model, workers receive a non-pecuniary cultural benefit from work in a particular industry. In the “cultural externality” model, consumers of a product receive utility from other consumer’s consumption of a domestic good. We show that resistance to change due to cultural concerns can reduce the national benefits from trade liberalization. Complete movements to free trade will have a positive national welfare impact in the cultural affinity case, whereas it may lower national welfare in the cultural externality case. We also show that a loss of cultural benefits is more likely to occur when culture is an externality.

Date: 2014
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