Description:

Speaker: Ryu Matsura

Title:  Political Implications of Trade Liberalization: Evidence from India (with Sebastian Jävervall and Roza Khoban)

Abstract: International trade substantially affects firms' business environments and economic development. However, little is known about the political and democratic consequences of these trade-induced changes. This project investigates how changes in the economic environment induced by trade liberalization affect political power concentration and political representation in India. Using exogenous variation in tariff reductions during India's trade liberalization in the 1990s and constructing a novel mapping between politicians and social communities in India, we show that the trade reform significantly shaped both the market structures and political power dynamics. In particular, we find that increased access to foreign inputs enhanced political representation in India by reducing political power concentration and fostering greater inclusion in political participation of historically marginalized groups.