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A Swing-State Theory of Trade Protection in the Electoral College

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Author Info
Mirabelle Muûls
Dimitra Petropoulou
Abstract

This paper develops an infinite-horizon, political agency model with a continuum of politicaldistricts, in which incumbent politicians can improve their re-election probability byattracting swing voters in key states through strategic trade protection. A unique equilibriumis shown to exist where incumbents build a reputation of protectionism through their policydecisions. We show that strategic trade protection is more likely when protectionist swingvoters have a lead over free-trade supporters in states with relatively strong electoralcompetition that represent a larger proportion of Electoral College votes. US data is used totest the hypothesis that industrial concentration in swing and decisive states is an importantdeterminant of trade protection of that industry. The empirical findings provide support forthe theory and highlight an important, and previously overlooked, determinant of tradeprotection in the US Electoral College.

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Paper provided by Centre for Economic Performance, LSE in its series CEP Discussion Papers with number dp0849.

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Date of creation: Feb 2008
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Handle: RePEc:cep:cepdps:dp0849

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Related research
Keywords: Political Economy Elections Electoral College Swing States Trade Policy

Find related papers by JEL classification:
D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Models of Political Processes: Rent-seeking, Elections, Legislatures, and Voting Behavior
D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy-Making and Implementation
F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
R12 - Urban, Rural, and Regional Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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  1. Kishore Gawande, 1998. "Comparing Theories Of Endogenous Protection: Bayesian Comparison Of Tobit Models Using Gibbs Sampling Output," The Review of Economics and Statistics, MIT Press, vol. 80(1), pages 128-140, February. [Downloadable!] (restricted)
  2. Theo Eicher & Thomas Osang, 2002. "Protection for Sale: An Empirical Investigation: Comment," American Economic Review, American Economic Association, vol. 92(5), pages 1702-1710, December. [Downloadable!] (restricted)
  3. Timothy Besley & Robin Burgess, 2002. "The Political Economy Of Government Responsiveness: Theory And Evidence From India," The Quarterly Journal of Economics, MIT Press, vol. 117(4), pages 1415-1451, November. [Downloadable!] (restricted)
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  4. Richard E. Caves, 1976. "Economic Models of Political Choice: Canada's Tariff Structure," Canadian Journal of Economics, Canadian Economics Association, vol. 9(2), pages 278-300, May. [Downloadable!] (restricted)
  5. Trefler, Daniel, 1993. "Trade Liberalization and the Theory of Endogenous Protection: An Econometric Study of U.S. Import Policy," Journal of Political Economy, University of Chicago Press, vol. 101(1), pages 138-60, February. [Downloadable!] (restricted)
  6. Grossman, Gene M & Helpman, Elhanan, 1994. "Protection for Sale," American Economic Review, American Economic Association, vol. 84(4), pages 833-50, September. [Downloadable!] (restricted)
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  7. Pinelopi Koujianou Goldberg & Giovanni Maggi, 1999. "Protection for Sale: An Empirical Investigation," American Economic Review, American Economic Association, vol. 89(5), pages 1135-1155, December. [Downloadable!] (restricted)
    Other versions:
  8. Besley, Timothy & Case, Anne, 1995. "Does Electoral Accountability Affect Economic Policy Choices? Evidence from Gubernatorial Term Limits," The Quarterly Journal of Economics, MIT Press, vol. 110(3), pages 769-98, August. [Downloadable!] (restricted)
    Other versions:
  9. Yang, C C, 1995. "Endogenous Tariff Formation under Representative Democracy: A Probabilistic Voting Model," American Economic Review, American Economic Association, vol. 85(4), pages 956-63, September. [Downloadable!] (restricted)
  10. Matsusaka, John G, 1993. " Election Closeness and Voter Turnout: Evidence from California Ballot Propositions," Public Choice, Springer, vol. 76(4), pages 313-34, August.
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  11. Grossman, Gene M & Helpman, Elhanan, 1996. "Electoral Competition and Special Interest Politics," Review of Economic Studies, Blackwell Publishing, vol. 63(2), pages 265-86, April. [Downloadable!] (restricted)
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  12. Willmann, Gerald, 2003. "Why Legislators are Protectionists: the Role of Majoritarian Voting in Setting Tariffs," Economics working papers 2003,10, Christian-Albrechts-University of Kiel, Department of Economics. [Downloadable!]
  13. Mayer, Wolfgang, 1984. "Endogenous Tariff Formation," American Economic Review, American Economic Association, vol. 74(5), pages 970-85, December. [Downloadable!] (restricted)
  14. John A List & Daniel M Sturm, 2006. "How Elections Matter: Theory and Evidence from Environmental Policy," The Quarterly Journal of Economics, MIT Press, vol. 121(4), pages 1249-1281, November. [Downloadable!] (restricted)
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  15. Pincus, J J, 1975. "Pressure Groups and the Pattern of Tariffs," Journal of Political Economy, University of Chicago Press, vol. 83(4), pages 757-78, August. [Downloadable!] (restricted)
  16. Hein Roelfsema, 2004. "Political Institutions and Trade Protection," Working Papers 04-06, Utrecht School of Economics. [Downloadable!]
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