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Protection for Sale or Surge Protection?

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Author Info

  • Susumu Imai

    ()
    (Queen's University)

  • Hajime Katayama

    ()
    (University of Sydney)

  • Kala Krishna

    ()
    (Pennsylvania State University and NBER)

Abstract

This paper asks whether the results obtained from using the standard approach to testing the influential Grossman and Helpman "protection for sale" (PFS) model of political economy might arise from a simpler setting. A model of imports and quotas with protection occuring 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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File URL: http://qed.econ.queensu.ca/working_papers/papers/qed_wp_1114.pdf
File Function: First version 2006
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Bibliographic Info

Paper provided by Queen's University, Department of Economics in its series Working Papers with number 1114.

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Length: 44 pages
Date of creation: Dec 2006
Date of revision:
Handle: RePEc:qed:wpaper:1114

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Keywords: Common agency; Political economy; Protection for sale; Quotas; Non tariff barriers;

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References

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  1. Susumu Imai & Hajime Katayama & Kala Krishna, 2010. "A Quantile-based Test of Protection for Sale Model," Global COE Hi-Stat Discussion Paper Series gd10-140, Institute of Economic Research, Hitotsubashi University.
  2. Matschke, Xenia N. & Sherlund, Shane M, 2003. "Do Labor Issues Matter In The Determination Of U.S. Trade Policy? An Empirical Reevaluation," Santa Cruz Department of Economics, Working Paper Series qt82k4x4f5, Department of Economics, UC Santa Cruz.
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  6. Koenker, Roger W & Bassett, Gilbert, Jr, 1978. "Regression Quantiles," Econometrica, Econometric Society, vol. 46(1), pages 33-50, January.
  7. Grossman, Gene M & Helpman, Elhanan, 1994. "Protection for Sale," American Economic Review, American Economic Association, vol. 84(4), pages 833-50, September.
  8. Jong-Wha Lee & Phillip Swagel, 2000. "Trade Barriers And Trade Flows Across Countries And Industries," The Review of Economics and Statistics, MIT Press, vol. 79(3), pages 372-382, August.
  9. Giovanni Facchini & Johannes Van Biesebroeck & Gerald Willmann, 2005. "Protection for Sale with Imperfect Rent Capturing," NBER Working Papers 11269, National Bureau of Economic Research, Inc.
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  15. Kishore Gawande, 1998. "Comparing Theories Of Endogenous Protection: Bayesian Comparison Of Tobit Models Using Gibbs Sampling Output," The Review of Economics and Statistics, MIT Press, vol. 80(1), pages 128-140, February.
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  17. 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.
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  22. kishore gawande & pravin krishna, 2005. "The Political Economy of Trade Policy: Empirical Approaches," International Trade 0503003, EconWPA.
  23. Phillip McCalman, 2004. "Protection for Sale and Trade Liberalization: an Empirical Investigation," Review of International Economics, Wiley Blackwell, vol. 12(1), pages 81-94, 02.
  24. Stephen Ansolabehere & John M. de Figueiredo & James M. Snyder, 2003. "Why Is There So Little Money in Politics?," NBER Working Papers 9409, National Bureau of Economic Research, Inc.
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  28. 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.
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Citations

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Cited by:
  1. Tovar, Patricia, 2011. "Lobbying costs and trade policy," Journal of International Economics, Elsevier, vol. 83(2), pages 126-136, March.
  2. Bradley J. McDonald & Christian Henn, 2011. "Protectionist Responses to the Crisis," IMF Working Papers 11/139, International Monetary Fund.
  3. Xenia Matschke, 2005. "Costly Revenue-Raising and the Case for Favoring Import-Competing Industries," Working papers 2005-28, University of Connecticut, Department of Economics, revised Apr 2007.
  4. 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.
  5. Marianna Belloc, 2007. "Protection for Sale in the EU," Working Papers 100, University of Rome La Sapienza, Department of Public Economics.
  6. 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.
  7. Susumu Imai & Hajime Katayama & Kala Krishna, 2010. "A Quantile-based Test of Protection for Sale Model," Global COE Hi-Stat Discussion Paper Series gd10-140, Institute of Economic Research, Hitotsubashi University.
  8. Marianna Belloc, 2014. "Neo-Protectionism and the European Lobbies," CESifo Working Paper Series 4832, CESifo Group Munich.
  9. 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.
  10. Joseph Mai & Andrey Stoyanov, 2014. "The Effect of the Canada-US Free Trade Agreement on Canadian," Working Papers 2014_2, York University, Department of Economics.

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