TY  - JOUR
AU  - Acemoglu,Daron
AU  - Yared,Pierre
TI  - Political Limits to Globalization
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 15694
PY  - 2010
Y2  - January 2010
UR  - http://www.nber.org/papers/w15694
L1  - http://www.nber.org/papers/w15694.pdf
N1  - Author contact info:
Daron Acemoglu
Department of Economics
MIT, E52-380B
50 Memorial Drive
Cambridge, MA  02142-1347
Tel: 617/253-1927
Fax: 617/253-1330
E-Mail: daron@mit.edu

Pierre Yared
Columbia University
Graduate School of Business
3022 Broadway, Uris Hall 823
New York, NY 10027
Tel: 212/854-9670
Fax: 212/662-8474
E-Mail: pyared@columbia.edu
AB  - Despite the major advances in information technology that have shaped the recent wave of globalization, openness to trade is still a political choice, and trade policy can change with shifts in domestic political equilibria. This paper suggests that a particular threat and a limiting factor to globalization and its future developments may be militarist sentiments that appear to be on the rise among many nations around the globe today. We proxy militarism by spending on the military and the size of the military, and document that over the past 20 years, countries experiencing greater increases in militarism according to these measures have had lower growth in trade. Focusing on bilateral trade flows, we also show that controlling flexibly for country trends, a pair of countries jointly experiencing greater increases in militarism has lower growth in bilateral trade.
ER  -