Commercial Imperialism? Political Influence and Trade during the Cold War

By D. Berger, William R. Easterly, Nathan Nunn, S. Satyanath. 2013

251 citations recorded by the source corpus.

We exploit the recent declassification of CIA documents and examine whether there is evidence of US power being used to influence countries' decisions regarding international trade. We measure US influence using a newly constructed annual panel of CIA interventions aimed at installing and supporting leaders during the Cold War. Our presumption is that the US had greater influence over foreign leaders that were installed and backed by the CIA. We show that following CIA interventions there was an increase in foreign-country imports from the US, but there was no similar increase in foreign-country exports to the US. Further, the increase in US exports was concentrated in industries in which the US had a comparative disadvantage in producing, not a comparative advantage. This is consistent with US influence being used to create a larger foreign market for American products. Our analysis is able to rule out decreased bilateral trade costs, changing political ideology, and an increased supply of US loans and grants as explanations for the increase in US exports to the intervened country. We provide evidence that the increase in US exports arose through direct purchases of US products by foreign governments.

Subfields: Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/3e35d63a4e9fa5010c3a97e53366916ae6bfab30

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Citations in the corpus

• Bilateral trade and shocks in political relations: Evidence from China and some of its major trading partners, 1990–2013 (2017, background): “(2014), Berger et al. (2013), Mityakov et al. (2013), and Heilmann (2016). 3 Goldstein scores are weights ranging from−10 to 10 that are applied to reports of international events obtained from news outlets and classified intoWEIS (World Events Interaction Survey) types.”
• State Control and the Effects of Foreign Relations on Bilateral Trade (2019, background): “Berger et al. (2013) find that the positive impact of CIA interventions on US imports by a country is conditional on the government’s share of the economy.”
• Pirates without Borders: The Propagation of Cyberattacks through Firms’ Supply Chains (2020, unknown): “Berger et al. (2013) and Dube, Kaplan and Naidu (2011) study the effects of CIA influence on trade and stock returns for firms with a particular interest in regime change, respectively.”
• Nation Building Through Foreign Intervention: Evidence from Discontinuities in Military Strategies (2018, unknown): “(5)Moreover, an empirical literature on the CIA documents their involvement in foreign coups and provides evidence that these interventions were commercially motivated (Berger et al., 2013; Dube et al., 2011).”