Classical Trade Protectionism 1815-1914 (Routledge Explorations in Economic History) by Pedro Lains

Author:Pedro Lains [Lains, Pedro]
Format: mobi
Tags: Economics, Finance, Business & Industry
Publisher: Taylor and Francis
Published: 2006-11-21T16:00:00+00:00

Figure 10.1 Nominal protection in Italy, 1860–1930.

with the composition of domestic output of tradable goods (NTw). Table 10.1 shows the calculation of these measures in five benchmark years.23

As can be seen, the differences between NT and the other indicators, while not completely negligible, are rather small, and not such as to change the overall assessment about the level of protection. The latter is also confirmed by another measure, logically different and methodologically much more sophisticated, the so-called Trade Restrictiveness Index (TRI).24 Protection increased from 1877 to 1889 and decreased from 1897 to 1913. Between 1889–97 and 1913–26, variations were modest, and their sign depends on the assumptions about the elasticity of imports.

Overall, therefore, the variations in the average tariff (NT) seem to be a reliable proxy for trends in the level of aggregate protection. Its over-time changes can be decomposed into:

i changes in nominal duties, then expressed in lire per unit of weight (duty effect);

ii changes in the ratio of nominal duties to prices (price effect);

iii changes in the composition of imports (quantity effect).

Table 10.2 shows the results of this decomposition for the various periods – in terms of unit percentage points of change in NT.

As can be seen, the price effect was quite important between the two last periods. The increase in prices between 1897 and 1913 (the tariffs being equal) contributed considerably to the drop in protection during

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