Case | HBS Case Collection | 2005 (Revised from original 2005 version)

To Trade or Not to Trade: NAFTA and the Prospects for Free Trade in the Americas

Abstract

Discusses the impact of the North American Free Trade Agreement (NAFTA) on the United States, Canada, and Mexico, a decade after it came into force in 1994. Keeping in mind NAFTA's effect on jobs, exports, productivity, and economic growth, policy makers had to decide whether to go ahead with the Free Trade Agreement of the Americas being negotiated by 34 countries in the Western hemisphere.

Keywords: History; Agreements and Arrangements; Performance Productivity; Jobs and Positions; Economic Growth; Trade; Foreign Direct Investment; North and Central America;

Format: Print

29 pages

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Citation:

Iyer, Lakshmi. "To Trade or Not to Trade: NAFTA and the Prospects for Free Trade in the Americas." Harvard Business School Case 705-034, November 2005. (Revised from original March 2005 version.)

It is now widely accepted that the lower castes have risen in Indian politics. Has there been a corresponding change in the economy? Using comprehensive data on enterprise ownership from the Economic Censuses of 1990, 1998, and 2005, we document substantial caste differences in entrepreneurship across India. The Scheduled Castes and Scheduled Tribes are significantly under-represented in the ownership of enterprises and the share of the workforce employed by them. These differences are widespread across all states, have decreased very modestly between 1990 and 2005, and cannot be attributed to broad differences in access to physical or human capital.

Using state-level variation in the timing of political reforms, we find that an increase in female representation in local government induces a large and significant rise in documented crimes against women in India. Our evidence suggests that this increase is good news, driven primarily by greater reporting rather than greater incidence of such crimes. In contrast, we find no increase in crimes against men or gender-neutral crimes. We also examine the effectiveness of alternative forms of political representation: large-scale membership of women in local councils affects crime against them more than their presence in higher level leadership positions.

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To Trade or Not to Trade: NAFTA and the Prospects for Free Trade in the Americas

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