Commercial Imperialism? Political Influence and Trade During the Cold War

Daniel Berger, William Easterly, Nathan Nunn and Shanker Satyanath

No 15981, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We exploit the recent declassification of CIA documents and examine whether there is evidence of US power being used to influence countries' decisions regarding international trade. We measure US influence using a newly constructed annual panel of CIA interventions aimed at installing and supporting leaders during the Cold War. Our presumption is that the US had greater influence over foreign leaders that were installed and backed by the CIA. We show that following CIA interventions there was an increase in foreign-country imports from the US, but there was no similar increase in foreign-country exports to the US. Further, the increase in US exports was concentrated in industries in which the US had a comparative disadvantage in producing, not a comparative advantage. This is consistent with US influence being used to create a larger foreign market for American products. Our analysis is able to rule out decreased bilateral trade costs, changing political ideology, and an increased supply of US loans and grants as explanations for the increase in US exports to the intervened country. We provide evidence that the increase in US exports arose through direct purchases of US products by foreign governments.

JEL-codes: F10 F5 F54 N70 (search for similar items in EconPapers)
Date: 2010-05
Note: DAE EFG ITI POL
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (19)

Published as Daniel Berger & William Easterly & Nathan Nunn & Shanker Satyanath, 2013. "Commercial Imperialism? Political Influence and Trade during the Cold War," American Economic Review, American Economic Association, vol. 103(2), pages 863-96, April.

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Journal Article: Commercial Imperialism? Political Influence and Trade during the Cold War (2013)
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