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Trade, Globalization, and Development Policy Economics

Mercatus Center research seeks to understand the consequences – both intended and unintended – of U.S. policy in other countries and improve the state of knowledge to which these policies refer, thereby fostering solutions that promote a freer, more prosperous, and civil society.  Through in-depth case analyses and field study Mercatus scholars work to develop advanced approaches rooted in a knowledge of the market process. Research focus includes: international economic development and the impact of foreign aid on global prosperity, entrepreneurship and the conditions that enable or inhibit a dynamic economic marketplace, the effects of trade and globalization, the political economy of reform and development, and specific area studies. 

Recent Publications

Competition and Corruption 

Working Papers
Werner Troesken
August 17, 2007

In this working paper, Dr. Troesken argues that political corruption and market competitiveness are inversely related. Highly competitive markets drive out corruption, while markets with high natural barriers to entry (e.g., those characterized by declining marginal costs and high fixed costs) allow corruption to flourish. Competition drives out corruption because corruption is costly and highcost enterprises are at a competitive disadvantage.

Pelosi, Bush, Clinton Stir Up Their Own Katrina 

News Articles and Op-Eds
Amity Shlaes
August 15, 2007

Journalist Amity Shlaes draws from Mercatus Center research to discuss the difficulties in post-Katrina reconstruction.

The Battle of Ideas: Economics and the Struggle for a Better World 

Journal Articles
Peter Boettke
August 7, 2007

This paper is Peter J. Boettke's speech at the twelfth Sir Ronald Trotter Lecture in New Zealand. Sir Ronald Trotter was the first chairman of the New Zealand Business Roundtable, who was knighted in 1985 for services to business. The Sir Ronald Trotter Lecture was instituted in 1995 by the New Zealand Business Roundtable to mark Sir Ronald Trotter’s many contributions to public affairs in New Zealand. It is given annually by a distinguished international speaker on a major topic of public policy.

Economic Affairs  

Journal Articles
Peter Boettke, Karol Boudreaux, Jasson Urbach, Mwangi S. Kimenyi, James Tooley, Philip Booth, Linda Whetstone
July 27, 2007

This special issue of Economic Affairs, the scholarly journal of London’s Institute of Economic Affairs, focuses on progress in the vital areas of entrepreneurial business development, post-conflict resolution, international trade, communications technology, and education.   While conditions are not perfect, these case studies clearly show how local entrepreneurs are making a positive difference to the lives of their fellow citizens.

The Politics of Bureaucracy and the Failure of Post-War Reconstruction 

Working Papers
Christopher Coyne
July 20, 2007

This working paper discusses Gordon Tullock's analysis of bureaucratic behavior and how this behavior has an effect on post-war reconstruction.

Coordination without Command: Stretching the Scope of Spontaneous Order 

Working Papers
Peter Leeson
July 20, 2007

In this working paper, Peter Leeson finds two significant cases in precolonial Africa that suggest a broader scope for spontaneous order than conventional wisdom permits. The first demonstrates the effectiveness of spontaneous order in the face of threats of violent theft. The second shows the effectiveness of spontaneous order in the face of social heterogeneity. 

Without Judgment: An Empirically-Based Entrepreneurial Theory of the Firm 

Working Papers
Saras Sarasvathy, Nicholas Dew
July 20, 2007

In this working paper, the authors use recent empirical work in entrepreneurship to identified key elements of what might reside inside the "black box" of entrepreneurial judgment. In doing so, they specify a framework for economic organization that substantially differs from current Austrian views, yet coheres with and builds upon key themes dear to Austrians including imagination, individual freedom, property rights, dispersed knowledge, the market as "a game without goods" and the powerful and inescapable role of human action in building and sustaining a value creating free society.

Can Ideas be Capital: Can Capital be Anything Else? 

Working Papers
Howard Baetjer, Peter Lewin
July 20, 2007

Value is necessarily forward looking; it relates to aims or purposes yet to be carried out, and capital value is a necessary aspect of capital. There is an indispensable knowledge component to all productive resources-all capital: physical, human or social. Physical things are not capital. In this working paper, Baetjer and Lewin shows that without ideas capital does not exist.

Strategic Human Resources Management: Between the Resource-Based View of the Firm and an Entrepreneurship Approach 

Working Papers
Adina Dabu
July 20, 2007

This working paper is an attempt to illustrate some of the avenues through which Austrian and entrepreneurship theory ideas are incorporated in management sciences.

The Creative Response in Firms 

Working Papers
Ivan Pongracic, Jr.
July 20, 2007

Over the last fifteen years a more complete list of benefits and costs of decentralization in firms has emerged. This working paper studies what these costs and benefits are and how they arise. The benefits are increased knowledge coordination and innovation. They result from better alignment of decision-making power with the employees holding the most appropriate knowledge and typifications. On the other hand, the costs arise from increased opportunism, incentive misalignment and institutional instability.

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