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barriers-to-trade

The ASI’s Tim Worstall has a good piece on the Globalisation Institute site, covering what he calls “the pernicious idea” that developing countries need to shelter behind tariff barriers to protect their fledgling industries. He quotes from Power and Plenty about the 19th century protectionism in America and Europe.

On balance, it appears that the new transport technologies were so cost-reducing that that their effects swamped those of rising European and American protectionism.

Tim’s case is that the overall costs of trade need to be low, especially transport costs, and the fact that they are not low in sub-Saharan Africa helps explain their lackluster performance. It’s a good, insightful piece, and well worth reading.