Ever since Donald Trump decided to run for US president, the issue of border walls has been thrust to the public’s attention. It’s an issue that has historically been a minor one, and indeed but a few decades ago there were fewer than a dozen border walls in the world.
New research from the University of Chicago aims to explore what impact these walls have on the economy. Why, the researchers ask, are border walls returning in an era that is supposed to be typified by openness and collaboration?
“Border walls are a symbol of the backlash against economic integration and globalization,” the researchers say. “Many argue that such backlash is what led to Brexit and to Donald Trump’s election.
Economic impact
The research utilized economic models to examine the impact physical border walls had on trade between the two neighboring countries. They found that median imports and exports were often reduced by as much as 31%.
Traditionally, border walls have been constructed by wealthier states to block the flow of goods and people from their poorer neighbor. Data from the last few centuries suggests that economic disparity between neighboring states is the strongest predictor for the construction of a wall, with the other main factor being the threat of attack.
The latest study attempts to build upon this body of work to explore the impact border walls have on global trade, or whether they are merely symbolic gestures to serve domestic political interests.
Decline in legal trade
Despite few border walls being constructed to impede legal trade between two countries, the research found that such physical barriers did nonetheless do just that. The researchers suggest this is largely because the border wall is the most visible manifestation of a wider body of policy, and it’s this collective range of interventions that seems to strangle trade.
Of course, there are times when border walls are erected despite rational arguments against them, and the authors cite the move in 1994 by Bill Clinton to erect a wall despite clearly acknowledging the impact it would have on the North American Free Trade Agreement with Mexico.
“There can be symbolic value associated with walls,” they say. “They allow a government to assert their sovereignty and demonstrate to a public that ‘they are in charge’ and they will ‘protect the public,’ whether that is protection from security threats or, more commonly the case, security from economic threats.”
Impact on trade
There are obviously a wide range of factors that can influence trade between two countries, whether that’s their form of government, historical alliances or ongoing disputes. The researchers attempted to control for each of these factors.
Equally, they didn’t try to gauge the desirability of trade between two states, and they accept that some border walls may be constructed with the express wish to reduce trade. Indeed, many walls may be constructed with full awareness of the likely economic consequences, as other factors are deemed more important.
The researchers hope their work allows for further analysis of the impact border walls have, not only on the economy but on areas such as security as well. With a seeming growth in rivalry and conflict between nations, it’s perhaps an analysis that is very timely.
“The American public should understand that while we associate the wall with US-Mexico relations and the rhetoric of Donald Trump, both represent a global phenomenon that has been unfolding for decades,” they conclude.
