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Trade Liberalization and Culture

Author

Listed:
  • Suranovic Steven

    (Department of Economics, The George Washington University, 1957 E St. N.W. Suite 502, Washington, DC 20052, USA)

  • Winthrop Robert

    (US Department of the Interior, Bureau of Land Management, Washington, DC, USA)

Abstract

This paper addresses the effect of international trade on cultural outcomes from both economic and anthropological perspectives. Definitions of culture are informed by anthropology and then incorporated into a standard economic trade models in two distinct ways. In the “cultural affinity from work” model, workers receive a non-pecuniary cultural benefit from work in a particular industry. In the “cultural externality” model, consumers of a product receive utility from other consumer’s consumption of a domestic good. We show that resistance to change due to cultural concerns can reduce the national benefits from trade liberalization. Complete movements to free trade will have a positive national welfare impact in the cultural affinity case, whereas it may lower national welfare in the cultural externality case. We also show that a loss of cultural benefits is more likely to occur when culture is an externality.

Suggested Citation

  • Suranovic Steven & Winthrop Robert, 2014. "Trade Liberalization and Culture," Global Economy Journal, De Gruyter, vol. 14(1), pages 57-78, June.
  • Handle: RePEc:bpj:glecon:v:14:y:2014:i:1:p:22:n:4
    DOI: 10.1515/gej-2013-0047
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    References listed on IDEAS

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    1. Mussa, Michael, 1974. "Tariffs and the Distribution of Income: The Importance of Factor Specificity, Substitutability, and Intensity in the Short and Long Run," Journal of Political Economy, University of Chicago Press, vol. 82(6), pages 1191-1203, Nov.-Dec..
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    5. Bala, Venkatesh & Van Long, Ngo, 2005. "International trade and cultural diversity with preference selection," European Journal of Political Economy, Elsevier, vol. 21(1), pages 143-162, March.
    6. Neary, J Peter, 1978. "Short-Run Capital Specificity and the Pure Theory of International Trade," Economic Journal, Royal Economic Society, vol. 88(351), pages 488-510, September.
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    Cited by:

    1. Winthrop, Robert H., 2014. "The strange case of cultural services: Limits of the ecosystem services paradigm," Ecological Economics, Elsevier, vol. 108(C), pages 208-214.

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