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Protection for Sale or Surge Protection?

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Author Info
Susumu Imai
Hajime Katayama
Kala Krishna

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Abstract

This paper asks whether the results obtained from using the standard approach to testing the influential Grossman and Helpman %u201Cprotection for sale (PFS)%u201D model of political economy might arise from a simpler setting. A model of imports and quotas with protection occurring in response to import surges, but only for organized industries, is simulated and shown to provide parameter estimates consistent with the protection for sale framework. This suggests that the standard approach may be less of a test than previously thought.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 12258.

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Date of creation: May 2006
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Handle: RePEc:nbr:nberwo:12258

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Find related papers by JEL classification:
F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Models of Political Processes: Rent-seeking, Elections, Legislatures, and Voting Behavior
B41 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Economic Methodology

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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.:
  1. Kishore Gawande & Usree Bandyopadhyay, 2000. "Is Protection for Sale? Evidence on the Grossman-Helpman Theory of Endogenous Protection," The Review of Economics and Statistics, MIT Press, vol. 82(1), pages 139-152, February. [Downloadable!] (restricted)
  2. Helpman, Elhanan, 1995. "Politics and Trade Policy," CEPR Discussion Papers 1269, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  3. 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!]
  4. Kishore Gawande & Pravin Krishna & Marcelo Olarreaga, 2005. "Lobbying Competition Over Trade Policy," NBER Working Papers 11371, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  5. Giovanni Facchini & Johannes Van Biesebroeck & Gerald Willmann, 2005. "Protection for Sale with Imperfect Rent Capturing," Development Working Papers 207, Centro Studi Luca d\'Agliano, University of Milano. [Downloadable!]
    Other versions:
  6. Devashish Mitra & Dimitrios Thomakos & Mehmet Ulubasoglu, 2006. "Can we obtain realistic parameter estimates for the `protection for sale' model?," Canadian Journal of Economics, Canadian Economics Association, vol. 39(1), pages 187-210, February. [Downloadable!] (restricted)
  7. 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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  8. Brainard, S. Lael & Verdier, Thierry, 1997. "The political economy of declining industries: Senescent industry collapse revisited," Journal of International Economics, Elsevier, vol. 42(1-2), pages 221-237, February. [Downloadable!] (restricted)
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  9. 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)
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  10. Phillip McCalman, 2004. "Protection for Sale and Trade Liberalization: an Empirical Investigation," Review of International Economics, Blackwell Publishing, vol. 12(1), pages 81-94, 02. [Downloadable!] (restricted)
  11. Ronald Findlay & Stanislaw Wellisz, 1982. "Endogenous Tariffs, the Political Economy of Trade Restrictions, and Welfare," NBER Chapters, in: Import Competition and Response, pages 223-244 National Bureau of Economic Research, Inc. [Downloadable!]
  12. Choi, E Kwan & Harrigan, James, 2004. "Handbook of International Trade," Staff General Research Papers 11375, Iowa State University, Department of Economics.
  13. Bombardini, Matilde, 2008. "Firm heterogeneity and lobby participation," Journal of International Economics, Elsevier, vol. 75(2), pages 329-348, July. [Downloadable!] (restricted)
  14. Rodrik, Dani, 1995. "Political economy of trade policy," Handbook of International Economics, in: G. M. Grossman & K. Rogoff (ed.), Handbook of International Economics, edition 1, volume 3, chapter 28, pages 1457-1494 Elsevier. [Downloadable!] (restricted)
  15. Xenia Matschke & Shane Sherlund, 2003. "Do Labor Issues Matter In The Determination Of U.S. Trade Policy? An Empirical Reevaluation," Santa Cruz Department of Economics, Working Paper Series 1029, Department of Economics, UC Santa Cruz. [Downloadable!]
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  16. Jong-Wha Lee & Phillip Swagel, 1994. "Trade barriers and trade flows across countries and industries," International Finance Discussion Papers 476, Board of Governors of the Federal Reserve System (U.S.). [Downloadable!]
    Other versions:
  17. Kishore Gawande & Pravin Krishna & Michael J. Robbins, 2004. "Foreign Lobbies and US Trade Policy," NBER Working Papers 10205, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  18. Hillman, Arye L, 1982. "Declining Industries and Political-Support Protectionist Motives," American Economic Review, American Economic Association, vol. 72(5), pages 1180-87, December. [Downloadable!] (restricted)
  19. kishore gawande & pravin krishna, 2005. "The Political Economy of Trade Policy: Empirical Approaches," International Trade 0503003, EconWPA. [Downloadable!]
  20. Wolfgang Keller, 1997. "Are International R&D Spillovers Trade-Related? Analyzing Spillovers Among Randomly Matched Trade Partners," NBER Working Papers 6065, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  21. Bernheim, B Douglas & Whinston, Michael D, 1986. "Menu Auctions, Resource Allocation, and Economic Influence," The Quarterly Journal of Economics, MIT Press, vol. 101(1), pages 1-31, February. [Downloadable!] (restricted)
  22. 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. [Downloadable!] (restricted)
  23. Kee, Hiau Looi & Olarreaga, Marcelo & Silva, Peri, 2007. "Market access for sale," Journal of Development Economics, Elsevier, vol. 82(1), pages 79-94, January. [Downloadable!] (restricted)
Full references

Cited by:
(explanations, 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.)

  1. Wilfred J. Ethier, 2002. "The Theory of Trade Policy and Trade Agreements: A Critique," PIER Working Paper Archive 06-013, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania, revised 05 Jun 2006. [Downloadable!]
    Other versions:
  2. Susumu Imai & Hajime Katayama & Kala Krishna, 2008. "A Quantile-based Test of Protection for Sale Model," NBER Working Papers 13900, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  3. Wilfred J. Ethier, 2006. "Selling Protection for Sale," PIER Working Paper Archive 06-014, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania, revised 01 Jun 2006. [Downloadable!]
  4. Susumu Imai & Hajime Katayama & Kala Krishna, 2007. "Is Protection Really for Sale? A Survey and Directions for Future Research," Working Papers 1151, Queen's University, Department of Economics. [Downloadable!]
    Other versions:
  5. Marianna Belloc, 2007. "Protection for Sale in the EU," Working Papers 100, Sapienza University of Rome, Department of Public Economics. [Downloadable!]
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