Comparative advantage, redistribution and the political process

Nicolas Boccard (), Tanguy van Ypersele and Pierre Wunsch
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Pierre Wunsch: Bureau fédéral du Plan, Brussels

No 1996051, LIDAM Discussion Papers CORE from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE)

Abstract: This paper analyses the interaction between comparative advantages, social protection and the political system. Considering entirely symmetrical countries whose production factors are immobile, we suggest that redistributive policies can be "exported” or "imported" depending on their impact on trade patterns. This points to the need of coordinating social policies in a second best world. However, we also show that competition from other countries could force a reduction in the exclusion from the labour market when the political process reduces to an insider-outsider story between employed and unemployed workers.

Date: 1996-10-01
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Persistent link: https://EconPapers.repec.org/RePEc:cor:louvco:1996051

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