Date of Award

Fall 2020

Project Type

Dissertation

Program or Major

Economics

Degree Name

Doctor of Philosophy

First Advisor

Bruce Elmslie

Second Advisor

Loris Rubini

Third Advisor

Deniz Ozabaci

Abstract

In this research I examine the effects that past institutions have on current day economics. In chapters one and two I focus on empirically measuring the impact of past historical trade institutions on current day trade flows. In chapter three I turn my focus to understanding how implicit institutions impact the economic discipline.

My first chapter begins with examining the historical legacy of trading institutions of membership in the ex-Soviet Union and Comecon on current day Russia's bilateral trade flows. The use of long-term data from 1998 to 2016 allows for examination of changes in the legacy effects over time, finding that overall historical patterns developed by these institutions remain highly significant 26 years after the collapse of the Soviet Union. Specifically finding that historical borders exert a positive, significant, but decaying impact on current day trade. Historical trading blocs also exhibit a similar pattern but are weaker and not as statistically significant. This chapter provides the first estimates of the legacy left by past institutions with an "institutional legacy decay" measure.

Chapter two I continue my focus on the historical institutions of ex-USSR and Comecon membership on bilateral trade flows to and from Russia. This paper is the first of its kind to examine how the components of Intra-Industry Trade (IIT) are impacted by historical trading institutions in the years of 1996 to 2018. In understanding the long reaching effects of the historical USSR border and Comecon trading bloc, this paper finds that all components of IIT are positively impacted by the historical trading institutions. Interestingly only Vertical Intra-Industry Trade (VIIT) shows signs of the impact of these institutions decaying in a monotonic fashion, while Horizontal Intra-Industry Trade (HIIT) indicates that the effect of historical institutions is much longer.

In chapter three I try to understand an important institution within the discipline of economics. Specifically, I focus on understanding how, given a specific set of assumptions about the market and market actors, the discipline advocates for a policy of free trade. The advocacy of free trade was not always as dominant especially during the first American Progressive Movement (1890-1918). Economists who led the movement (i.e. the Economic Progressives) reconstructed society in their image of a technocrat ran state. In their view laissez-faire, and ultimately free trade as an expression of laissez-faire, was the antithesis of the new economic order they created. In spite of all their success, the Economic Progressives were unable to banish free trade from economic theory. I argue this failure was a function of a contradiction in their core research philosophies as well as their inherent philosophical bias. These biases and contradictions, when contrasted with other schools of thought, made the Economic Progressives movement seem less attractive and potentially led to its downfall.

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