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

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  • Dimitra Petropoulou
  • Mirabelle Muuls

Abstract

This paper develops an infinite-horizon, political agency model with a continuum of political districts, in which incumbent politicians can improve their re-election probability by attracting swing voters in key states through strategic trade protection. A unique equilibrium is shown to exist where incumbents build a reputation of protectionism through their policy decisions. We show that strategic trade protection is more likely when protectionist swing voters have a lead over free-trade supports in states with relatively strong electoral competition that represent a larger proportion of Electoral College votes. US data is used to test the hypothesis that industrial concentration in swing and decisive states is an important determinant of trade protection of that industry. The empirical findings provide support for the theory and highlight an important, and previously overlooked, determinant of trade protection in the US Electoral College.

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Bibliographic Info

Paper provided by University of Oxford, Department of Economics in its series Economics Series Working Papers with number 372.

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Date of creation: 01 Nov 2007
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Handle: RePEc:oxf:wpaper:372

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Keywords: Political Economy; Elections; Electoral College; Swing States; Trade Policy;

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  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.
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  16. 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.
  17. 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.
  18. Gene Grossman & Elhanan Helpman, 1994. "Electoral Competition and Special Interest Politics," NBER Working Papers 4877, National Bureau of Economic Research, Inc.
  19. 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.
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Cited by:
  1. Elena Besedina, 2010. "Exporting, Productivity and Government Interventions: Is There a Link?," Discussion Papers 28, Kyiv School of Economics.

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