Trade liberalization, distribution and employment
Abstract
The paper approaches aspects of the political economy of trade liberalization. It
examines the reasons for the establishment of protectionist practices, the social costs of such
practices and the relation between distributive conflicts and protectionism, emphasizing the
formation of distributive coalitions. We apply these concepts and ideas to the Brazilian case
in order to examine the distributive effects of the protectionist structure which prevailed
until the late 1980’s and the potential changes over the 1990’s. Finally, we develop a macroeconomic
model to explore the effects of liberalization on the functional distribution of
income and aggregate demand.
JEL Classification: F14; F16; F43; D72.
Keywords: Trade liberalization protectionism interest groups