4
technologies, have stymied economic growth in Africa.(Collier and Gunning, 1999)
Contrasting with these ‘policy’ driven arguments about economic growth are ‘destiny’
arguments. Gallup and Sachs argue that geography matters, citing such factors as the sparsity of
coastal populations and landlockedness, which increase product distribution costs, and the
deleterious effects of malaria. Others have argued that colonial legacies and the institutions they
left behind have caused some countries to thrive and others to suffer. (Acemoglu, Johnson,
Robinson, 2001; Acemoglu, Johnson, Robinson, 2000).
Still other scholars have written that freer trade can explain economic growth. Ricardo
wrote, in the early 1800s, one of the earliest theories for this in his model of comparative
advantage. However, his model assumes zero transportation costs and in the real world they are
not zero. Nevertheless, many scholars have found evidence that free-trading countries do better
than protectionist countries on average. (Lindert and Williamson, 2001, Dollar and Kraay 2002,
Frankel and Romer 1999)
Yet some countries still embrace protectionism. Rogowski has put forward a theory for
why this happens. He writes that the three main groups in factors of production – capitalists,
landowners, and workers – are also three influential political constituencies or groups. The
groups that are disadvantaged by trade, if sufficiently numerous, can influence political decisions
on protectionism, particularly in democracies where officials wish to be reelected. His theory is
informed by the Stolper-Samuelson theorem, which asserts that when trade is liberalized, the
owners of the relatively abundant factors experience an increased return on their investments and
gains in their real incomes, while investors in the relatively scarce factors experience the
opposite effects on investments and income. The significance of the Stolper-Samuelson theorem
is that even if trade helps an economy as a whole, there can still be losing groups within the
country – those who are the holders of scarce factors – and this can lead to increasing
August
2005
Convention