New results on the tariff–growth paradox

David Jacks

European Review of Economic History, 2006, vol. 10, issue 2, 205-230

Abstract: This article investigates the question of how openness affected the growth of income in the late nineteenth-century Atlantic economy. More specifically, is the tariff-growth correlation identified by O'Rourke (2000) driven by European offshoots? Is the correlation perhaps explained by the concurrent integration of intranational markets before 1914? And what can other measures of openness tell us about the growth process in the nineteenth century? This note offers some answers. The results can be summarised as follows: O'Rourke's primary finding is not altered by changes in the sample; incorporating measures of inter- and intranational market integration into the analysis again supports O'Rourke's findings, but apparently leaves no role for intranational market integration; and evidence from trade-flow data suggests that there may been a pro-growth role for tariffs in a non-reciprocal trade environment.

Date: 2006
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