Decomposing the Economic Costs and Benefits of Accession to the EU: the Swiss Case

This paper proposes a decomposition of the likely effects of a "deep" regional integration arrangement for a small country. It is based on a steady-state general equilibrium model which allows to capture the long-term effects of a variety of factors, including the reduction of non-tariff barriers, immigration, budgetary transfers and monetary integration. Particular care is given to the modeling of wealth accumulation, with savings endogenized on the basis of an overlapping generation framework. The effects of product standardization in manufacturing are simulated on the basis of ex-post estimates of the pro-competitive effects of the Single Market Program.regional integration, applied general equilibrium

Globalization and Dirty Industries: Do Pollution Havens Matter?

This paper reviews arguments and evidence on the impact of globalization on the environment, then presents evidence on production and international trade flows in five heavily polluting industries for 52 countries over the period 1981-98. A new decomposition of revealed comparative advantage (RCA) according to geographical origin reveals a delocalization to the South for all heavily polluting industries except non-ferrous metals that exhibits South-North delocalization in accordance with factor-abundance driven response to a reduction in trade barriers. Panel estimation of a gravity model of bilateral trade on the same data set reveals that, on average, polluting industries have higher barriers-to-trade costs (except non-ferrous metals with significantly lower barriers to trade) and little evidence of delocalization in response to a North-South regulatory gap.

The Political Economy of International Migration in a Ricardo-Viner Model

Determinants of national policies towards immigration are analysed in the context of an economy open to international trade. Arguments for the existence of an "immigration surplus" are reviewed and followed by an interpretation of the principal contributions of the political economy literature in a Ricardo-Viner model in a direct democracy framework. A median voter model is grafted on several variants of the specific-factor open-economy model to discuss several recent changes in attitudes towards immigration (a stiffened stance, especially towards the unskilled) and in national policies ("melting-pot" vs. guest-worker programs, coexistence of legal and illegal immigrants, lax enforcement towards illegals).

Who determines Mexican trade policy?

Using a political economy approach, the authors analyze the pattern of protection in Mexico's manufacturing sector during the period of trade policy reforms (1985-89), when Mexico experienced significant trade liberalization and an important inflow of foreign direct investment. They take into account the potential effect of foreign direct investment on endogenous tariff formation. It turns out that the data support this analytic approach, in which the formulation of trade policy reflects political support, and in which the presence of foreign direct investment in the sector strongly affects the pattern of tariff protection before and after reform. In Mexican manufacturing, especially, sectors with heavy foreign direct investment received greater protection in import-competing sectors, although the move toward greater openness was associated with a reduction in the influence of industrial and foreign-investor lobbying.Environmental Economics&Policies,Payment Systems&Infrastructure,Economic Theory&Research,Banks&Banking Reform,Trade Policy,Foreign Direct Investment,Economic Theory&Research,Trade and Regional Integration,TF054105-DONOR FUNDED OPERATION ADMINISTRATION FEE INCOME AND EXPENSE ACCOUNT,Environmental Economics&Policies

Unraveling the worldwide pollution haven effect

This paper contributes to the debate on the existence of pollution haven effects by systematically measuring the pollution content of trade (measured by the pollution content of imports, PCI) and decomposing it into three components-a"deep"component (unrelated to the environmental debate but including variables traditionally present in the gravity model) and two components (factor endowments and environmental policies) that occupy center stage in the debate on trade and the environment. The decomposition is carried out for 1986-88 for an extensive data set covering 10 pollutants, 48 countries, and 79 ISIC 4-digit sectors. Illustrative decompositions presented for three of the 10 pollutants in the data set indicate a significant pollution haven effect which increases the PCI of the North because of stricter environmental regulations in the North. At the same time, the factor endowment effect decreases the PCI of the North as the North is relatively well-endowed in capital and pollution-intensive activities are also capital-intensive. On a global scale, because the bulk of trade is intraregional with a high North-North share, these effects are small relative to the"deep"determinants of the worldwide pollution content of trade. In sum, although the impact has been stronger on vertical (North-South) trade flows, differences in factor endowments and environmental policies have only marginally affected the pollution content of world trade during the 1986-88 period.Environmental Economics&Policies,Water and Industry,Brown Issues and Health,Transport Economics Policy&Planning,Water Resources Assessment

Unraveling the World-Wide Pollution Haven Effect

This paper contributes to the debate on the existence of pollution haven effects by systematically measuring the pollution content of trade (measured by the polluction content of imports (PCI)) and decomposing it into three components: a 'deep' (i.e. unrelated to the environmental debate) component and two components (factor endowments and environmental policies) that occupy centerstage in the debate on trade and the environment. The decomposition is carried out for 1986-88 for an extensive data set covering 10 pollutants, 48 countries and 79 ISIC 4-digit sectors. Illustrative decompositions presented for 3 of the 10 pollutants in the data set indicate a significant pollution haven effect and highlight the role of factor endowments in each region's PCI. However, because the bulk of trade is intra-regional with a high North-North share, these effects are small relative to the 'deep' determinants of the worldwide pollution content of trade.trade and the environment; pollution haven

Unraveling the World-Wide Pollution Haven Effect

This paper contributes to the debate on the existence of pollution haven effects by systematically measuring the pollution content of trade (measured by the polluction content of imports (PCI)) and decomposing it into three components: a ‘deep’ (i.e. unrelated to the environmental debate) component and two components (factor endowments and environmental policies) that occupy centerstage in the debate on trade and the environment. The decomposition is carried out for 1986-88 for an extensive data set covering 10 pollutants, 48 countries and 79 ISIC 4-digit sectors. Illustrative decompositions presented for 3 of the 10 pollutants in the data set indicate a significant pollution haven effect and highlight the role of factor endowments in each region’s PCI. However, because the bulk of trade is intra-regional with a high North-North share, these effects are small relative to the ‘deep’ determinants of the worldwide pollution content of trade.Trade and the Environment, Pollution Haven

Unravelling the Worldwide Pollution Haven Effect

This paper tackles the “pollution haven” argument by estimating the pollution content of imports (PCI). The PCI is then decomposed into three components: (i) a “deep” component (i.e. traditional variables unrelated to the environmental debate); (ii) a factor endowment component and (iii) a “pollution haven” component reflecting the impact of differences in environmental policies. The estimation is carried out for 1987 for an extensive data set covering 10 pollutants, 48 countries and 79 ISIC 4-digit sectors. Decompositions based on cross-section econometric estimates suggest a significant pollution haven effect which increases the PCI of the North because of stricter environmental regulations in the North. At the same time, the factor endowment effect lowers the PCI of the North, as the North is relatively well-endowed in capital and pollution-intensive activities are capital intensive. On a global scale, because the bulk of trade is intra-regional with a high North-North share, these effects are small relative to the “deep” determinants of the worldwide PCI. In sum, differences in factor endowments and environmental policies have only marginally affected the PCI of world trade at the end of the eighties.Trade and The Environment, Pollution Haven Effect, Factor Endowment Effect