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Thick borders in Franco’s Spain: the costs of a closed economy

Author

Listed:
  • Rodolfo G. Campos

    (Banco de España)

  • Iliana Reggio

    (Universidad Autónoma de Madrid)

  • Jacopo Timini

    (Banco de España)

Abstract

Between the 1940s and 1970s, Spain used a variety of economic policies that hindered international trade. Because the mix of tariffs, quotas, administrative barriers, and exchange rate regimes varied greatly over time, the quantification of the effect of the various trade policies on international trade in this period is particularly elusive. In this paper, we use historical bilateral trade flows and a structural gravity model to quantify the evolution of Spain’s border thickness, a summary measure of its barriers to international trade. We find that Spain’s borders in the period 1948-1975 were thicker than those of any other country in Western Europe, even after the liberalization of trade that started in 1959. These comparatively higher impediments to international trade implied substantial negative effects on consumer welfare. We estimate that accumulated welfare costs over the period 1948-1975 exceed 20% of a year’s total consumption.

Suggested Citation

  • Rodolfo G. Campos & Iliana Reggio & Jacopo Timini, 2022. "Thick borders in Franco’s Spain: the costs of a closed economy," Working Papers 2209, Banco de España.
    • Handle: RePEc:bde:wpaper:2209
    as

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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Spain; Stabilization Plan; international trade; autarky;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F62 - International Economics - - Economic Impacts of Globalization - - - Macroeconomic Impacts
    • N74 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services - - - Europe: 1913-

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