Pushan Dutt

INSEAD | INSEAD · Area of Economics and Political Science

In this paper, we establish the importance of experience in international trade in reducing unmeasured trade costs and facilitating bilateral trade. We find a strong role for experience, measured in years of positive trade, for both aggregate and sectoral bilateral trade. In an augmented gravity framework, with a very comprehensive set of fixed eff...

Research Summary There continues to be substantial debate on whether and how providing inclusive access to finance through microcredit promotes entrepreneurship‐led development at the base of the pyramid. We contribute to this literature by examining differences in household‐level outcomes associated with microfinance loans given for different purp...

The empirical literature on the effect of trade agreements has reached a consensus that WTO effects are insignificant or modest at best especially compared to the robust and strong positive effect of preferential trade agreements (PTAs) on bilateral trade (Rose, 2004; Eicher and Henn, 2011; Baier and Bergstrand, 2007, 2009). In this paper, we show...

We draw upon recent advances that combine causal inferences with machine learning, to show that poverty is the key income distribution measure that matters for development outcomes. In a predictive framework, we first show that LASSO chooses only the headcount measure of poverty from 37 income distribution measures in predicting schooling, institut...

In the literature on inequality and economic development, the overwhelming focus is on the Gini coefficient, a single statistic for the entire income distribution. In this paper, we question this singular focus on the Gini coefficient and evaluate the relative importance of a host of income distribution measures. We draw upon recent advances in cau...

Microenterprise loans are commonly considered an effective way of having social impact at the base of the pyramid (BOP). We examine evidence for this in the context of a microfinance company, investigating how economic outcomes associated with loans meant for supporting microenterprises compare with those for other kinds of loans. While loans targe...

In this paper, we establish the importance of experience in international trade for reducing trade costs and facilitating bilateral trade. Within an augmented gravity framework, we find that an additional year of experience at the country-pair level reduces trade costs by 2.0% and increases bilateral exports by 8%. The effect of experience is stron...

We use 6-digit bilateral trade data to document the effect of WTO/GATT membership on the extensive and intensive product margins of trade.We construct gravity equations for the two product margins motivated by Chaney (2008). The empirical results show that standard gravity variables provide good explanatory power for bilateral trade on both margins...

The dramatic impact of the current crisis on performance of businesses across sectors and economies have been headlining the business press for the past many months. Interestingly, the impact of the crisis across categories of goods/services and across economies reveals several interesting patterns. Extant reconciliations of these patterns in the p...

We use 6-digit bilateral trade data to document the effect of WTO/GATT membership on the extensive and intensive product margins of trade. We construct gravity equations for the two product margins where the specifications of these gravity equations are motivated by the model of Eaton and Kortum (2002). The data show that the puzzle of no significa...

Abstract We examine whether increased trade with countries with ineffective protection of intellectual property has contributed to the skill-deepening of the 1980s. We construct an index of effective protection of intellectual property at the country level, combining data on protection of patents and rule of law. Next, we construct an industry-spec...

Despite numerous policy reforms since the 1980s, farm product prices remain heavily distorted in both high-income and developing countries. This book seeks to improve our understanding of why societies adopted these policies, and why some but not other countries have undertaken reforms. Drawing on recent developments in political economy theories a...

This is a product of a research project on Distortions to Agricultural Incentives, under the leadership of Kym Anderson of the World Bank's Development Research Group. The authors are grateful for very useful comments and discussions from seminar participants, particularly Jo Swinnen and Will Martin, and for funding from World Bank Trust Funds prov...

Abstract We examine whether protectionist trade policies lead to increased bureaucratic corruption. Using multiple measures of corruption and trade policies, we find strong evidence that corruption is significantly higher in countries with protectionist trade policies. These results are robust to endogeneity concerns. Next, a panel-data-based GMM m...

The promise of emerging and developing economies has created unprecedented interest from businesses in recent times. Yet, the reality of these economies, are levels of volatility that are unheard of in developed markets. For example, there have been 435 currency crises across 195 countries over the period 1960-2006 years. Recent events show that cr...

In this paper, we document patterns of export diversification, its evolution over time, the drivers of export diversification, and its consequences for economic development. First, we show that trade costs—measured in terms of distance to trading centers and market access through a host of trading arrangement (multilateral, bilateral and unilateral...

We use monthly stock market indices for 58 countries to construct pairwise correlations of returns and explain these correlations with differences in the industrial structure across these countries. We find that countries with similar industries have stock markets that exhibit high correlation of returns. The results are robust to the inclusion of...

We create alternative measures of political instability, which capture only movements from dictatorship to democracy and vice versa and, unlike older, well-known measures, does not capture government changes that preserve the democratic or dictatorial structure of the country. We show that inequality is positively correlated with our measures of po...

We present a model of trade and search-induced unemployment, where trade results from Heckscher–Ohlin (H-O) and/or Ricardian comparative advantage. Using cross-country data on trade policy, unemployment, and various controls, and controlling for endogeneity and measurement-error problems, we find fairly strong and robust evidence for the Ricardian...

The paper presents some empirical puzzles in the relationship between bureaucratic wages and corruption levels, and attempts to reconcile them within a general equilibrium framework that leads to multiple equilibria in the incidence of corruption. In the presence of such multiple equilibria, the relationship between bureaucratic wages and corruptio...

The strong negative link between democracy and output volatility documented by Rodrik (2000) and others stands in sharp contrast to the lack of consensus on the democracy-growth relationship. To explain stable growth performance in democracies we characterize political systems in terms of the distribution of political power across groups, and show...

We analyze the impact of corruption on bilateral trade, highlighting its dual role in terms of extortion and evasion. Corruption taxes trade, when corrupt customs officials in the importing country extort bribes from exporters (extortion effect); however, with high tariffs, corruption may be trade enhancing when corrupt officials allow exporters to...

Trade policy depends on the extent to which the government wants to redistribute income as well as on a country's overall factor endowments and their distribution. While the government's desire to redistribute income itself is dependent on asset distribution, it is to a large extent also driven by the partisan nature of the government, i.e., whethe...

This paper explores the hypothesis that changes in trading patterns and partners of US industries have contributed to skill deepening through defensive, skill-biased innovation. It draws on Thoenig and Verdier's (2003) assertion that, since skill-intensive technologies are less likely to be imitated, increased exposure to international competition...

In this paper, we investigate empirically how government ideology affects trade policy. The prediction of a partisan, ideology-based model (within a two-sector, two-factor Heckscher-Ohlin framework) is that left-wing governments will adopt more protectionist trade policies in capital-rich countries, but adopt more pro-trade policies in labor-rich c...

Trade policy depends on the extent to which the government wants to redistribute income as well as on a country's overall factor endowments and their distribution. While the government's desire to redistribute income itself is dependent on asset distribution, it is to a large extent also driven by the partisan nature of the government, i.e., whethe...

The median-voter approach to trade policy determination (within a Heckscher-Ohlin framework) as in Mayer [Am. Econ. Rev. 74(5) (1984) 970] predicts that an increase in inequality, holding constant the economy’s overall relative endowments, raises trade barriers in capital-abundant economies and lowers them in capital-scarce economies. We find suppo...

This paper develops and tests a model, which predicts that protectionist policies on the part of the government leads to increased corruption on part of the bureaucracy. A one-sector small open economy model is presented. Corruption is shown to be increasing in tariffs and subsidies, and decreasing in civil sector wages. Using multiple measures of...

Typescript. Thesis (Ph. D.)--New York University, Graduate School of Arts and Science, 2000. Includes bibliographical references (leaves 182-194).