In the paper the endogenous trade model follows the Grosman and Helpman (1994 y 1995) tradition. The structure of the economy is characterised by a specific factor trade model and consumers' preferences are quasilinears. Owners of specific factors all are organised in lobby groups and the ownership are very concentrated.The available options to the government are mantain the trade policy status quo or implement an opening trade reform. Lobbys group influence this discretional government with income contribution taking into account its own objective function. The equilibrium of the game is studied in two differents situations: without exceptions in the trade liberalisation; with the presence of sector exception list. It is shown that a commercial opening that is not a political equilibrium (it is not incentives compatible) when the government wants to make it in general, however can be so if the government is able to isolate certain sectors from the international competition, through long periods of adjustment (given by gradual policies or the existence of exceptions list).
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
page. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.