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Rogowski: Political cleavages and changing exposure to trade

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Rogowski. 1987. Political cleavages and changing exposure to trade. American Political Science Review 81 (December): 1121-1137.

In Brief

The Stolper-Samuelson theorem says that trade liberalization benefits holders of abundant resources but hurts holders of scarce resources. Rogowski extends this to its logical conclusion, which is that changes in a state's exposure to trade should have profound effects on its domestic political cleavages. Thus, structurally-induced international factors (war, another country's tariff rates, changes in shipping prices) that change a country's exposure to trade can affect domestic political cleavages. See Rogowski's tables on pages 1125 and 1127.

See also Hiscox 2001.

Argument

Stolper-Samuelson theorem: If you've got lots of land but not much labor, then, in autarky, laborers can charge a very high price to work the land. Trade liberalization hurts laborers, whose wage would fall closer to the global average, and benefits land owners, whose land values would rise closer to the global average.

Rogowski assumes there are three groups: landowners, laborers, and capital holders. See tables on 1125 and 1127.

If trade is suddenly expanded (for example, shipping gets cheaper), this empowers holders of abundant goods. If land and capital is abundant and labor is scarce, then prices will go up for land and capital but down for labor. Land and capital will form a political coalition against labor's anti-trade stance. Moreover, the exogenous shock that increases trade will further empower holders of land and capital by givinig them greater wealth.

Similarly, if land is abundant but labor and capital are scarce, expect a rural-urban political cleavage to emerge.

Definitely compare with Hiscox (2001). Apparently, Rogowski relies too heavily on the Stolper-Samuleson's theorem, which assumes perfect factor immobility. There is another theorem that assumes perfect factor mobility and comes to a very different result. Hiscox makes factor mobility the independent variable.