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Trade in raw materials and economic development

Garred, Jason (2015) Trade in raw materials and economic development. PhD thesis, The London School of Economics and Political Science (LSE).

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Abstract

This thesis considers three cases in which trade in natural resources and other raw materials can inform us about wider questions of economic development. The first chapter, “Capturing the Value Chain: The Persistence of Trade Policy in China After WTO Accession”, considers whether in the GATT/WTO era, developing countries are still able to actively conduct trade policy. In this study, I show that after China’s entry into WTO, required import tariff reductions on downstream sectors have been partly offset by an alternative policy with similar effects: export restrictions on raw materials. I also find that larger rises in Chinese raw materials export taxes after WTO accession have been associated with greater downstream export growth. The second chapter, “Winners and Losers from a Commodities-for-Manufactures Trade Boom”, examines two contrasting outcomes of the ‘de-industrialization’ associated with rising trade between China and other developing countries. In particular, this chapter compares changes in labour market outcomes in Brazilian regions stimulated by rising demand from China for raw materials, with Brazilian regions whose manufacturing sectors have been harmed by Chinese import competition. While there was slower growth in manufacturing wages and greater rises in local wage inequality in ‘loser’ regions between 2000 and 2010, ‘winner’ regions experienced higher wage growth, lower takeup of cash transfers and positive effects on job quality. The third chapter,“Access to Raw Materials and Local Comparative Advantage: The Effects of India’s Freight Equalization Policy”, considers the importance of access to raw materials for industrial development. It does so by looking at the effects of a Indian policy that aimed to remove regional comparative advantages associated with proximity to raw materials, by equalizing prices of steel across India. The results suggest that in practice, this policy may have had only a limited effect on access to raw materials across Indian states.

Item Type: Thesis (PhD)
Additional Information: © 2015 Jason Garred
Library of Congress subject classification: H Social Sciences > HB Economic Theory
Sets: Departments > Economics
Supervisor: Burgess, Robin and Sturm, Daniel and Sampson, Thomas
URI: http://etheses.lse.ac.uk/id/eprint/3092

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