The Evidence for Free Trade and Its Background Assumptions: How Well-Established Causal Generalisations Can Be Useless for Policy

Luis Mireles-Flores

Review of Political Economy, 2022, vol. 34, issue 3, 534-563

Abstract: In this article, I offer a methodological analysis of the empirical research on the causal effects of trade liberalisation, and assess whether such studies can be of any use for guiding policy prescriptions in real-world economies. The analysis focuses on the mainstream economic research that has been used to support arguments in favour of trade liberalisation during the last decades. Even though there are empirical results that could be taken as valid evidence for a causal connection between free trade and economic gains, none of the existing evidence licences trustworthy inferences about the policy effectiveness of trade liberalisation reforms in real-world cases. There are three aspects of the empirical literature that make it highly problematic for making reliable policy inferences: (a) the criteria used to define the notion of ‘free trade’, (b) the background assumptions embedded in the econometric techniques used for estimating causal effects, and (c) the widespread desire among academic economists to attain scientific results in terms of universally valid generalisations. The analysis exposes a worrisome mismatch between, on the one hand, the research aims and outcomes of scientific economics and, on the other, the kind of evidence that would be useful for guiding actual policy deliberations.

Date: 2022
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/09538259.2021.1912484 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:revpoe:v:34:y:2022:i:3:p:534-563

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/CRPE20

DOI: 10.1080/09538259.2021.1912484

Access Statistics for this article

Review of Political Economy is currently edited by Steve Pressman and Louis-Philippe Rochon

More articles in Review of Political Economy from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().