Socio-economic Growth and Protectionism

Paper Summary:

This paper explains that many theories and empirical data support the hypothesis that an increase in scale concentrates social power (economics), which refers to individuals' abilities to impose their will on others. The author points out that commercial growth seems to shift social power to the top at an unprecedented scale; as a result, the absolute number of poor appears to be increasing faster than the number of truly wealthy. The paper relates that one method used to measure the degree of protectionism within an economy is the average tariff rate because tariffs generally reduce imports of foreign products; therefore, the higher the tariff, the greater the protection afforded to the country's import-competing industries.

From the Paper:

"Thus, we might imagine an index of protectionism (IP) defined mathematically as follows: The numerator to represent the sum of all exports and imports across all trade categories given the current set of trade policies, while the denominator would represent the sum of all exports and imports that would obtain if the government employed a set of domestic policies that had no impact on trade of goods and services with the rest of the world. If IP = 1, it would indicate that current government policies are completely non-restrictive and the economy could be characterized as being in a pure state of "free trade." If IP = 0, then government policies would be so restrictive as to force the economy into a state of isolation. If we could calculate and compare the index across many countries, then we could say that countries with a smaller value were more protectionist than countries with a higher value. We could also monitor changes in the index over time for a particular country. Increases in the index value would indicate trade liberalization, while decreases in the index would indicate growing protectionism."

More papers on Socio-economic Growth and Protectionism :

• Analytical Essay # 121907 : "Socio-Economic Status and Political Participation"
• Term Paper # 147714 : "Economic Growth and Inequality"
• Research Paper # 7899 : "The Stimulus FDI has Provided in Harnessing India's Economic Potential"

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