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A Rationale for Quota Protection: A Political Economy Approach

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Author Info
Jay Pil Choi (Columbia University)

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Abstract

This paper provides a political economy rationale for quota protection in declining industries. When the government maximizes a Stigler-Peltzman type political support function, a quota may have a political advantage over a tariff in that the level of the quota, once it is implemented, does not need to change. A tariff, however, requires constant readjustment in order to sustain the same static political-support-maximizing price. This asymmetry in the transparency of protection can make quota protection more appealing to policymakers than the equivalent tariff protection.

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File URL: http://college.holycross.edu/eej/Volume22/V22N4P421_424.pdf
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Publisher Info
Article provided by Eastern Economic Association in its journal Eastern Economic Journal.

Volume (Year): 22 (1996)
Issue (Month): 4 (Fall)
Pages: 421-424
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Handle: RePEc:eej:eeconj:v:22:y:1996:i:4:p:421-424

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Related research
Keywords: Protection; Quotas; Tariff;

Find related papers by JEL classification:
F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

Cited by:
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  1. Joseph Pelzman & Amir Shoham, 2006. "De-linking the Relationship between Trade Liberalization and Reduced Domestic Fiscal Budgets: The Experience of the Israeli Economy: 1984-2005," Global Economy Journal, Berkeley Electronic Press, vol. 6(3). [Downloadable!]
  2. Kubota, Keiko, 2000. "Fiscal constraints, collection costs, and trade policies," Policy Research Working Paper Series 2366, The World Bank. [Downloadable!]
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