The political economy of trade liberalization and its impact on institutional development (Argentina, Chile, Mexico)

This dissertation offers an explanation as to why countries that liberalize their trade regime also tend to liberalize other areas of the economy. The explanation stems from the fact that countries that shift from an inward-oriented to an outward-oriented trade regime create structural economic and political changes in the economy. Specifically, countries that liberalize their trade regime will increase the importance that exports play in fueling the economy, and, hence, exporting firms will play a larger role in determining policy.; The dissertation found that countries open to trade had more secure property rights, greater reliance on the market to determine prices, more overall economic freedom, more political freedoms (i.e., more likely to be a democracy), and less incidences of corruption than compared to countries that were more closed to international trade.; The dissertation also conducted three case studies, examining the experiences of Argentina, Chile and. Mexico. The dissertation found that Chile and Mexico centered their economic reforms on the liberalization of the trade regime, while Argentina centered its reforms on taming inflation. As such, the dissertation found that Chile and Mexico strengthened the interest group made up of exporters and export-related firms that supported its market-oriented reforms, while Argentina failed to develop a similar interest group, calling into question the durability of the reforms in Argentina.