Politics and Trade Policy
AbstractThe paper first describes a number of political economy approaches that have been developed to explain trade policies. All approaches are presented in a unified framework that helps to identify the key differences between them. These comparisons revolve around tariff formulas that are predicted by political equilibria. A typical formula explains cross-sectoral variations in rates of protection as well as differences in average rates of protection across countries. Second, I review a set of results that emerge from a new approach to the interaction of international economic relations with domestic politics. Importantly, there are two-way interactions in such systems. They link the formation of trade policies in the international arena with the activities of domestic special interest groups. The use of a framework of this sort is essential for a proper analysis of a host of important problems, such as negotiations about tariff levels or the formation of free trade areas. Recent studies have developed suitable tools for this purpose.
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Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 1269.
Date of creation: Nov 1995
Date of revision:
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Other versions of this item:
- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
- F15 - International Economics - - Trade - - - Economic Integration
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