Trade Development and Political Economy present: Daniel Lederman

Daniel Lederman Lead Economist in the World Bank's International Trade Department Trade Causes Growth in Sub-Saharan Africa Authors: Markus Brückner and Daniel Lederman In the 1990s the mainstream consensus was that trade causes growth. Subsequent research shed doubt on the consensus view, as evidence suggested that the identification of the effect of trade on growth was problematic in the existing literature. This paper contributes to this debate by focusing on growth in Sub-Saharan Africa. It estimates the effect of openness to international trade on economic growth with panel data. Employing instrumental variables techniques that correct for endogeneity bias, the empirical evidence suggests that within-country variations in trade openness cause economic growth: a one percentage point increase in the ratio of trade over GDP is associated with a short-run increase in growth of approximately 0.5 percent per year; the long-run effect is larger, reaching about 0.8 percent after ten years. These results are robust to controlling for country and time fixed effects as well as political institutions. Speaker: Daniel Lederman is a Lead Economist in the World Bank's International Trade Department, which is part of the Poverty Reduction and Economic Management Network. During September 2005 - April 2011 he was a Senior Economist in the World Bank's Development Research Group, specializing in International Trade and Integration. Daniel joined the World Bank on November 1995 as a Consultant in the Office of the Chief Economist for Latin America and the Caribbean and was a Senior Economist when he moved to the Research Group in 2005. Prior to joining the World Bank, Daniel was a Junior Economist with the United Nations Economic Commission for Latin America and the Caribbean (ECLAC). Daniel received an M.A. and a PhD in International Relations from the Johns Hopkins University School of Advanced International Studies (SAIS) and a B.A. in Political Science from Yale University. His work has been published in highly ranked economics journals such as the American Economic Review, the European Economic Review etc.