Dictatorship, Democratization, and Trade Policy

By Ben Zissimos (University of Exeter Business School)

In a landmark paper, Daron Acemoglu and James Robinson argue that a key purpose of democratization is to resolve a commitment problem faced by a ruling elite under the threat of revolution.[1]  Their motivation focuses on 19th and early 20th Century Europe, during which time a number of countries in the region democratized, thus originating a number of today’s mature democracies.  The commitment problem that Acemoglu and Robinson characterize arises if the elite cannot make sufficiently large transfers within a single period, to compensate the rest of society for the gains that they would enjoy from a revolution.  If transfers must be made over multiple periods, and if the threat of revolution may dissipate prior to the transfers being completed, then the elite will not be able to credibly commit to transfers large enough to defuse the threat of revolution. By extending the franchise, the elite transfer power to set taxes to the rest of society.  Thus, democratization enables the elite to make a credible commitment to transfers over multiple periods sufficiently large to defuse the threat of a revolution.

In Acemoglu and Robinson’s model, domestic lump-sum redistributive taxation is the policy instrument used by the elite to make transfers from the elite to the rest of society.  This policy instrument simplifies the framework nicely in order to focus on the commitment role of democratization.  Yet subsequent research has shown that domestic fiscal capacity did not exist for redistributive taxation prior to extension of the franchise.  The power to tax is taken for granted in a great deal of mainstream public finance.  But, as Tim Besley and Torsten Persson note, a ruling elite may have an incentive not to install domestic fiscal capacity if they think it will facilitate redistribution from them to the rest of society.[2]  Supportive of this view, Toke Aidt and Peter Jensen show for the time period that Acemoglu and Robinson discuss, that countries in Europe and elsewhere typically did not have domestic redistributive taxation prior to extension of the franchise.  These observations open the door to a discussion of whether domestic redistributive income taxation could in fact have been used as part of a strategy to resolve the commitment problem through democratization.

In a recent paper, I identify the circumstances under which trade taxes, the capacity for which did exist in 19th-20th century Europe both prior to and after extension of the franchise, can be used to make such redistributions and hence resolve the commitment problem identified by Acemoglu and Robinson.[3]  I do this by combining Acemoglu and Robinson’s model with a classic Heckscher-Ohlin model with trade policy due to Wolfgang Meyer.[4]  The resulting new model yields insights that would not be available from either of the original models on their own.  For example, contrary to the recommendation of classical scholars, I show that when the group in power chooses its optimal trade policy, democratization may in fact go hand in hand with increased protectionism and a decline in economic efficiency.  This suggests that although democratization would broadly be regarded as desirable, it may have some adverse consequences.  In Acemoglu and Robinson’s original model, because taxation was lump-sum, policy changes associated with democratization could have no adverse efficiency implications.

My paper also identifies a new role for trade policy: that of maintaining political stability for a ruling elite regime.  Since the elite would always prefer to retain power (including the power to set trade taxes) rather than extend the franchise, the paper provides a way to think about when the elite can use trade policy to forestall democratization.[5] As an alternative to extending the franchise, the elite may be able to neutralize the threat of revolution and forestall democratization by making temporary concessions to the rest of society over trade policy, thus using trade policy to maintain their grip on power.  The framework that I develop makes it possible to delineate precisely where the elite face a commitment problem and hence must extend the franchise, and where they do not face a commitment problem and hence can use trade policy to forestall democratization.  I use the framework to motivate British and Prussian trade policy in the 19th Century, arguing that both of their ruling elites used trade policy to forestall democratization.


Daron Acemoglu and James A. Robinson (2000); “Why Did the West Extend the Franchise? Democracy, Inequality, and Growth in Historical Perspective.Quarterly Journal of Economics, 115(4): 1167-1199. [Working paper version]

Daron Acemoglu and James A. Robinson (2006); Economic Origins of Dictatorship and Democracy.  Cambridge University Press, Cambridge.

Toke S. Aidt and Peter S. Jensen, (2009); “Tax Structure, Size of Government and the Extension of the Voting Franchise in Western Europe, 1860–1938.International Tax and Public Finance, 16: 160-175. [Working paper version]

Timothy Besley and Torsten Persson, (2009); “The Origins of State Capacity: Property Rights, Taxation, and Politics.American Economic Review, 1218–1244. [Working paper version]

Timothy Besley and Torsten Persson, (2014); “Why Do Developing Countries Tax So Little?Journal of Economic Perspectives 28(4): 99–120. [Working paper version]

Sebastian Galiani and Gustavo Torrens (2014); “Autocracy, Democracy and Trade Policy. Journal of International Economics,  93(1): 173-193. [Working paper version]

Wolfgang Mayer, (1984); “Endogenous Tariff Formation.” American Economic Review, 74(5): 970-985.

Ben Zissimos (2017); “A Theory of Trade Policy under Dictatorship and Democratization.Journal of International Economics, 109: 85-101. [Working paper version]


[1] Acemoglu and Robinson (2000). See also Acemoglu and Robinson (2006) for a broader discussion.

[2] Besley and Persson (2009); see also Besley and Persson (2014)

[3] Zissimos (2017)

[4] Mayer (1984)

[5] Galianni and Torrens (2014) also have an element of this, in that an elite can choose between autarky and free trade to help maintain political stability.  In my paper, the full spectrum of trade policy between autarky and free trade can also be considered, including the trade policy revenue implications, making it possible to analyze incremental changes to trade policy.  This makes it possible to show how trade policy can be used to defuse the threat of revolution in the absence of all domestic fiscal capacity.  In turn this opens the door to a consideration of elite trade policy reactions to world price shocks.

Call for Papers: 13th Australasian Trade Workshop Department of Economics, University of Auckland, New Zealand

24-25 March 2018

The Department of Economics at the University of Auckland will host the 13th Australasian Trade Workshop on 24-25 March 2018. We are pleased to announce that the keynote speakers for this year will be Andrew Bernard (Dartmouth) and Davin Chor (National University of Singapore).

We invite colleagues in this field (JEL-Classification F0 to F2) to submit papers for presentation at the workshop. If you are interested, please send your abstract or preferably your complete paper (in .pdf format) to .

The deadline for submissions is November 1, 2017.

Conference participants are expected to serve as discussants at the
workshop. There is no registration fee. Unfortunately we are unable to
offer financial assistance to participants. Upon acceptance, you will be
asked to book your travel and accommodation independently.

If you have any further questions about the workshop, please e-mail Asha Sundaram at .


Permanent ATW webpage: https://www.rse.anu.edu.au/seminars-events/conferences/australasian-trade-workshop/

Local ATW 2018 webpage: https://sites.google.com/site/atwauckland2018/home

Associate or Full Professor of Economics, University of Kentucky

The Department of Economics seeks to fill a position at the rank of associate or full professor. The department has six areas of specialization offered in our graduate program: Macroeconomics, International Economics, Public Economics, Labor Economics, Industrial Organization, and Health/Environmental Economics. While we welcome outstanding applicants from any of these fields, preference will be given to applicants with a focus in Public Economics, Industrial Organization or Health Economics. Preferred candidates include senior faculty with an appointment at the associate or full professor level (with tenure). The successful candidate must have a strong record of scholarly accomplishment and teaching. The appointee will be an affiliate of the John H. Schnatter Institute for the Study of Free Enterprise.

For more information about the Economics department, please visit http://gatton.uky.edu/economics.
In order to be considered a candidate, you will need to complete the following two steps.
1. Complete an Academic Profile within the University of Kentucky employment system and upload a CV and cover letter.
2. Submit your job market materials to https://www.econjobmarket.org. Applicants will also need to arrange for three confidential letters of recommendation to be submitted through this site.

Applicants should endeavor to provide their materials prior to November 15, 2017 for consideration of interviews at the 2018 ASSA meetings in Philadelphia. However, consideration of applications will continue until the positions are filled

For questions regarding the application process, please email .

Tenured/Tenure-track faculty positions, Economics, NYU Shanghai

NYU Shanghai is currently inviting applications for several positions at the ranks of assistant, associate, or full professor in Economics. We are especially but not exclusively interested in candidates whose research topics fall in the areas of econometrics, microeconomics, decision making and behavior, public health, or political economy, and in candidates whose research settings include China, or Asia more broadly. Our search is, however, open in terms of research topics and settings, and we will consider highly qualified candidates in all fields of economics. Successful candidates will demonstrate the capacity both for significant research and for high-quality instruction in the classroom.

The terms of employment in NYU Shanghai are comparable to those in U.S. institutions in terms of compensation and research start-up funds, and include housing subsidies and educational subsidies for children. NYU Shanghai faculty members may also spend time at NYU New York and other sites in NYU’s global network, in order to engage in teaching or research. The position features a standard teaching load of three courses per year.

We are open to immediate applications, and we will continue to review applications until the positions are filled, for appointments to begin in the Fall 2018 semester.  The deadline for junior applications is November 26th, 2017.  All applicants should submit a curriculum vitae, separate statements of research and teaching interests (no more than three pages each), and electronic copies of up to three recent relevant publications or working papers.  Junior applicants should also submit the names and email addresses of at least three referees, who will be contacted to upload their reference letters. In the case of mid-career and senior applicants, reference letters will be requested at a later stage as needed. Please visit our website at https://shanghai.nyu.edu/en/about/work-here/open-positions-faculty for instructions and other information on how to apply.

To apply follow this link https://apply.interfolio.com/43751.

If you have any questions, please e-mail pr46@nyu.edu.

About NYU Shanghai:
NYU Shanghai is the newest degree-granting campus within New York University’s global network.  It is the first higher-education joint venture in China authorized to grant degrees that are accredited in the U.S. as well as in China. All teaching is conducted in English. A research university with liberal arts and science at its core, NYU Shanghai resides in one of the world’s great cities with a vibrant intellectual community.
NYU Shanghai recruits scholars of the highest caliber who are committed to NYU’s global vision of innovative research and transformative teaching, and who embody the global society in which we live.

NYU’s global network includes degree-granting campuses in New York, Shanghai, and Abu Dhabi, complemented by eleven additional academic centers across five continents. Faculty and students circulate within the network in pursuit of common educational interests and cross-cultural, interdisciplinary endeavors, both local and global.

NYU Shanghai is an equal opportunity employer committed to equity, diversity, and social inclusion. We strongly encourage applications from individuals who are under-represented in the profession, across color, creed, race, ethnic and national origin, physical ability, and gender and sexual identity. NYU Shanghai affirms the value of differing perspectives on the world as we strive to build the strongest possible university with the widest reach.

EOE/AA/Minorities/Females/Vet/Disabled/Sexual Orientation/Gender Identity Employer

Conference: International Trade and Finance Association (IT&FA), Beijing

Edition: 28th International Conference
Host: The International Trade and Finance Association
Partner University: Beijing University of International Business and Economics Beijing, China
Theme: New Paradigms in the Global Economy
Dates: May 23 – 26, 2018
Location: Beijing, China 


28th Conference of the International Trade and Finance Association will be held in Beijing, China,
May 23-26 (Wednesday to Saturday), 2018. We are delighted that Beijing University of Business and Economics is hosting our 2018 conference.


IT&FA is a multi-disciplinary association, and welcomes scholars and professionals from economics and finance, marketing and management, law, communications and other disciplines with an interest in globalization and the global economy. The conference will consist of regular competitive sessions, as well as plenary sessions dealing with high-profile issues.

We invite proposals on all aspects of international trade and finance, including such emerging issues as cyber security and economic warfare, digital free trade and e-commerce, intellectual property protections, and trade in various services. As in the past, IT&FA seeks papers on trade policy, exchange rates, investments and capital flows, banking, migration, tourism, communications, transportation, governance and law, and management and marketing. Industry-specific studies are welcome (such as agriculture, retail, textiles, and entertainment), as are proposals dealing with multilateral, regional, and national issues impacting international trade and finance. Theoretical, conceptual and empirical papers are also invited.

  • Program: Offers discussions of economic topics across many disciplines via speakers and panels.
  • Special Events: The Presidential Address, award presentations, paper/panel presentations, gala dinner, and networking opportunities.
  • Proceedings: The International Trade and Finance Association will publish an electronic “Papers and Proceedings” edition highlighting selected papers from the meeting.
  • Paper Awards: We offer US$500 for the best paper submitted to the conference and US$250 for the best student paper, along with certificates confirming each.


IT&FA’s registration fee is US$300 to all participants/US$125 for students who submit initial registration materials and abstracts by January 31, 2018. The late registration fee is $350 after January 31, 2018. This fee will cover registration, associated expenses, and one year’s membership in IT&FA.

Cancellations: Before April 15, 100% of the registration fee is refundable. After April 15, 50% of the fee is refundable.

The conference will open with a reception on Wednesday, May 23, hold sessions on Thursday and Friday, including a banquet on Friday evening, and conclude with final sessions or a group event on Saturday, May 26. Those planning to depart on Sunday, May 27, will have time to investigate the unique circumstances that connect China to the evolving global economy. These include important history, world-class cultural beautiful parks, and shopping.

IT&FA seeks both proposals for individual papers and for complete sessions. Complete sessions should have three to four papers. In the case of multiple authors for a paper, at least one author must register for the conference. No participant will be permitted to present more than two papers.


  • November 1, 2017, to January 31, 2018 – Registration Materials and Abstracts submitted for Peer Review
  • February 15, 2018 – Notification of Acceptance by this date
  • March 31, 2018 – Payment of Registration Fee Due. Visa documentation requests due along with payment, if not requested earlier.
  • April 15, 2018 – Deadline for Hotel Registrations. Cancellation for 100% returned fees, 50% return fees hereafter.
  • May 1, 2018 – Conference schedule posted online
  • May 23 to 26, 2018 – Conference convenes at Beijing University of International Business and Economics

For additional registration information and updates, please see the association website: http://www.itfaconference.org If you have any questions, please contact

Prof. Sarah K. Bryant, the Executive Vice President, at skbryant12@outlook.com.

Venice Summer Institute 2018: Globalisation and Populism: Past and Present

Time: Jun 4, 2018 9 AM – Jun 5, 2018 2 PM

Address: San Servolo, Venice, Italy

The UK referendum on EU membership on 23 June 2016 is thought to have been a watershed moment in European integration and globalisation more broadly. It was quickly followed by the election of Donald Trump as president of the United States on an explicitly “America First” agenda with strong anti-globlisation elements. It seems that anti-globalisation forces have become mainstream. This workshop will bring together leading researchers working on the distributional consequences of gloablisation and its political repercussions, both in modern and in historic perspective. The aim is to also bring in important complementary perspectives on this topic drown from history, economics and political science.

Keynote speakers: David D. Laitin, Stanford University, Dani Rodrik, Harvard University, and Kevin Hjortshoj O’ Rourke, University of Oxford.

Scientific organiser(s): Professor Sascha O. Becker, Dr Thiemo Fetzer

Faculty / postdoc, ifo Institute, Munich

The ifo Institute is one of Europe’s leading economic research institutes and is renowned for its research activities, its policy advisory work and its international services. It promotes internationally recognised research in the field of economics and provides intensive training for junior economists.

The ifo Center for Energy, Climate and Exhaustible Resources has an immediate vacancy for a postdoc researcher (m/f). The Center’s research activities, as well as the focal points of its economic and energy policy advisory activities are shaped by the need to address the major challenges facing politics, business and society arising from climate change, the target of a sustainable energy supply and the scarcity of natural resources.

Your tasks

  • Research in the field of energy and climate economics, with a focus on the transformation and modelling of energy systems
  • Publishing research results, especially via articles in leading international, peer-reviewed journals and presentations at international conferences
  • Conception, acquisition, management and implementation of third-party funded projects
  • Transfer of research results to the general public with a focus on publishing articles on the economic and energy policy debate

Your qualifications

  • A very good doctorate in economic sciences with a focus on economics, the energy industry, energy technology or mathematics
  • Proven knowledge and experience of the Center’s core research areas as demonstrated by articles in high-level journals or working papers suitable for publication
  • In-depth knowledge of energy and climate economics
  • Experience with numerical methods of energy system modelling
  • An excellent command of English
  • German language skills would be an advantage

We offer

  • Policy-oriented empirical economics research within a top research team at one of Europe’s leading  think-tanks
  • The opportunity to network and acquire extensive international experience
  • The option of teaching  at the Ludwig Maximilian University of Munich
  • A working contract initially limited to three years that may be extended.
  • Compensation and benefits based on the German public service pay scale (TV-L).

As an equal opportunity employer, the ifo Institute encourages applications from men and women. Women are expressly encouraged to apply.

Please send your completed application under reference number 2017-035-EKR-PD by 15 October 2017 preferably by email (as a pdf-file ) to president@ifo.de to:

ifo Institute

Leibniz-Institute for Economic Research at the University of Munich

Poschingerstraße 5, 81679 Munich


Should you have any queries, please contact Susanne Crefeld or Juliane Neumeier at 089/9224-1289.

Financial Officers and Economists Positions, International Labour Organisation (ILO)

$82,064 – $151,058

The International Labour Organization (ILO), is the United Nations agency for the world of work.

It sets international labour standards, promotes rights at work and encourages decent employment opportunities, the enhancement of social protection and the strengthening of dialogue on work-related issues.

The ILO is the only tripartite UN agency, bringing together governments, employers’ and workers’ representatives.

If you would like to work within an internationally diverse, globally challenging, highly principled environment and you have a proven track record of high performance, then the ILO is the right place for you.

The ILO values diversity among its staff and aims at achieving gender parity. We welcome applications from qualified women and men, including those with disabilities.

The ILO is hiring professionals in the following technical and managerial areas from P2 level (entry) to P5 level (managerial). These positions are located in the ILO headquarters in Geneva, Switzerland, and in selected Decent Work Teams across regions.

The closing date for applications is 5 October 2017.

For further information and details on how to apply, please visit https://erecruit.ilo.org

(Only on-line applications submitted via ILO eRecruitment system are accepted.)

Support for Research – Foscolo Europe Top-up

The call for applications for the 3rd Foscolo Europe Top-Up Fellowshipcompetition is now open. The main objective of this competition is to attract and retain outstanding PhD graduates in Europe, who might otherwise choose to begin and develop their career overseas.

The Foundation offers two 3-year top-up fellowships in economic and financial subjects to be assigned to the two best departments or research institutes in Economics or Finance participating to the PhD job markets (US job market or any equivalent organization in Europe) in 2017/18.

This top-up fellowship complements the salary and contractual terms of the standard tenure track assistant professorships and is awarded to each institution at the same time as a recruitment for such positions.

The competition is open to all departments in Economics or Finance from any university or research institute within the 14 countries of the UniCredit perimeter.

UniCredit & Universities Foundation awards €50,000 gross per year to each winning department for 3 years, for a total amount of €150,000 gross. The fellowships will start on October 1, 2018.

For further details on the requirements and admission procedure, download the announcement.

Submission deadline: September 30, 2017

The winners of the 2nd Top-Up Fellowship are:

– Mannheim University –top-up recipient Matthias Meier
– Università di Bologna – top-up recipient Enrico Cantoni