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Discretion, Lobbying, and Political Influence in Models of Trade Policy

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  • Michael Hoffman

Abstract

Most models of trade policy determination and rent-seeking abstract from the problem of commitment: both the politician's commitment to implement a policy and the lobbyist's commitment to contribute to the politician. This article shows that the commitment problem is a static prisoner's dilemma, in which neither lobbying nor inefficient policies occur. The only way to rationalize the existence of lobbying and protection within a finite time horizon is in a repeated game with uncertain duration. I construct a model in which the uncertainty comes from periodic elections. The model has implications for redistribution and political influence across political systems and institutions.

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File URL: http://www.tandfonline.com/doi/abs/10.1080/13841280500181650
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Bibliographic Info

Article provided by Taylor & Francis Journals in its journal Journal of Economic Policy Reform.

Volume (Year): 8 (2005)
Issue (Month): 3 ()
Pages: 175-188

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Handle: RePEc:taf:jpolrf:v:8:y:2005:i:3:p:175-188

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Related research

Keywords: Discretion; trade policy; rent-seeking; political institutions;

References

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  13. kishore gawande & pravin krishna, 2005. "The Political Economy of Trade Policy: Empirical Approaches," International Trade 0503003, EconWPA.
  14. Lopez, Edward J, 2003. " Term Limits: Causes and Consequences," Public Choice, Springer, vol. 114(1-2), pages 1-56, January.
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  16. Martín Rama, 1994. "Endogenous Trade Policy: A Time-Series Approach," Economics and Politics, Wiley Blackwell, vol. 6(3), pages 215-232, November.
  17. Devashish Mitra & Dimitrios D. Thomakos & Mehmet A. Ulubaşoglu, 2002. ""Protection For Sale" In A Developing Country: Democracy Vs. Dictatorship," The Review of Economics and Statistics, MIT Press, vol. 84(3), pages 497-508, August.
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  19. Kydland, Finn E & Prescott, Edward C, 1977. "Rules Rather Than Discretion: The Inconsistency of Optimal Plans," Journal of Political Economy, University of Chicago Press, vol. 85(3), pages 473-91, June.
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