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Building Trade Barriers and Knocking Them Down

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  • Gould, David M
  • Woodbridge, Graeme L

Abstract

This paper examines the dynamic behavior of trade protection and liberalization. Consistent with evidence on the development of trade policies, policy decisions are modeled as the outcome of a political contest between import-competing interests and exporters. Uncertainty about the success of political contests yields a dynamic equilibrium in which tariffs gradually increase over time. Eventually, increasing tariffs reduce profits in the exporting sector to such a degree that exporters enter the political arena and lobby actively against protection. Depending on the market characteristics, a political contest may generate a liberalization or a move toward autarky. Copyright 1997 by Blackwell Publishing Ltd.

Suggested Citation

  • Gould, David M & Woodbridge, Graeme L, 1997. "Building Trade Barriers and Knocking Them Down," Review of International Economics, Wiley Blackwell, vol. 5(2), pages 256-271, May.
    • Handle: RePEc:bla:reviec:v:5:y:1997:i:2:p:256-71
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