Whether governments clash in trade disputes or negotiate over trade agreements, their actions in the international arena reflect political conditions back home. Previous studies of cooperative and non-cooperative trade relations have focused on governments that are immune from political pressures and act as benevolent servants of the public interest. Here we take a first step towards introducing domestic politics into the analysis of international economic relations. We study the interactions between national leaders who are concerned both with providing a high standard of living to the general electorate and collecting campaign contributions from special interest groups. The analysis reveals the determinants of the structure of protection in a non-cooperative trade war and in a cooperative trade agreement.
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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number
806.
Grossman, G.M. & Helpman, E., 1992.
"Trade Wars and Trade Talks,"
Papers
163, Princeton, Woodrow Wilson School - Public and International Affairs.
Find related papers by JEL classification: D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Models of Political Processes: Rent-seeking, Elections, Legislatures, and Voting Behavior F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
Gene M. Grossman & Elhanan Helpman, 1992.
"Protection For Sale,"
NBER Working Papers
4149, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted)
Grossman, G.M. & Helpman, E., 1992.
"Protection for Sale,"
Papers
162, Princeton, Woodrow Wilson School - Public and International Affairs.
Chaim Fershtman & Kenneth L Judd, 1984.
"Equilibrium Incentives in Oligopoly,"
Discussion Papers
642, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
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