Trade Liberalization and Political Violence: Evidence from North-South Preferential Trade Agreements

Francesco Amodio, Leonardo Baccini and Giorgio Chiovelli, and Michele Di Maio
Authors registered in the RePEc Author Service: Michele Di Maio and Giorgio Chiovelli

No 2020/41, RSCAS Working Papers from European University Institute

Abstract: This paper explores the micro-foundations of the trade-conflict nexus. We focus on the reduction of tariffs on agricultural imports from South countries to North countries as resulting from Preferential Trade Agreements. We combine the variation in agricultural tariffs over time with differences in crop suitability across districts within South countries. Our analysis covers 27 South countries and all their PTAs signed with major North countries between 1995 and 2014. Our approach rests upon the observation that differences in agro-climatic conditions within the country generate exogenous variation in suitability to produce different crops. Using 9km x 9km cells as unit of observations, we test if the North-South trade liberalization agreement affect levels of political violence and instability differentially in those districts that are more suitable to produce liberalized crops. We find robust evidence that in those cells, PTAs increase economic output and political violence, in line with the rapacity effect mechanism.

Keywords: Political violence; trade; agriculture; preferential trade agreement. (search for similar items in EconPapers)
JEL-codes: D22 D24 F51 N45 O12 (search for similar items in EconPapers)
Date: 2020-06
New Economics Papers: this item is included in nep-dev, nep-int and nep-pol
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Citations: View citations in EconPapers (1)

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