Geography, Policy, or Productivity? Regional Trade in Five South American Countries, 1910-1950

53 Pages Posted: 29 Dec 2014 Last revised: 23 Apr 2021

See all articles by Marc Badia-Miro

Marc Badia-Miro

University of Barcelona - Faculty of Economic Science and Business Studies

Anna Carreras-Marín

University of Barcelona

Christopher M. Meissner

University of California, Davis

Date Written: December 2014

Abstract

Regional trade in South America since independence has long been much smaller than would be expected if geography were the only constraint on trade. Several potential explanations exist: low technological and demand complementarities; low productivity; high natural and policy barriers to trade. Focusing on the latter explanations, policy makers have long advocated a South American/Southern Cone Free Trade Area–proposed as early as 1889. Would reductions in trade costs have been sufficient to significantly raise trade, or was trade low for other reasons? We study bilateral trade between 1910 and 1950, when large external shocks altered global supply and demand. These shocks help us show that intra-regional trade could have been boosted with reductions in trade costs. South American regional trade could have benefitted from more benign trade policy or better infrastructure. Regional trade in textiles, which took off from the 1930s, supports our argument that trade improved when trade costs fell.

Suggested Citation

Badia-Miro, Marc and Carreras-Marín, Anna and Meissner, Christopher M., Geography, Policy, or Productivity? Regional Trade in Five South American Countries, 1910-1950 (December 2014). NBER Working Paper No. w20790, Available at SSRN: https://ssrn.com/abstract=2543642

Marc Badia-Miro (Contact Author)

University of Barcelona - Faculty of Economic Science and Business Studies ( email )

Barcelona
Spain

Anna Carreras-Marín

University of Barcelona

Gran Via de les Corts Catalanes, 585
Barcelona, 08007
Spain

Christopher M. Meissner

University of California, Davis ( email )

One Shields Avenue
Apt 153
Davis, CA 95616
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
6
Abstract Views
299
PlumX Metrics