Bairoch revisited. Tariff structure and growth in the late 19th century

Abstract

This paper revisits Bairoch’s hypothesis that tariffs were positively associated with growth in the late 19th century, as confirmed recently by a new generation of quantitative studies (see O`Rourke (2000), Jacks (2006) and Clements-Williamson (2002, 2004)). This paper highlights the importance of the structure of protection in the relation between trade policy and growth and its potential growth-promoting impact. Evidence is based in a new data base on industrial tariffs for the 1870`s. First results, based on these findings, show that protection was only positive for a “rich club” if we include in this group New Settler countries which grew rapidly in the late 19th century. Leaving out these countries, which protected mainly for fiscal reasons, the evidence shows that more protection, indicated by total average and manufacture tariff average, implied more un-skilled inefficient protection and less growth and this is especially true for the poor countries in the late 19th century.Tariffs and growth, Tariff structure, Late 19th Century