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Trade Policy in Majoritarian Systems: The Case of the U.S

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Author Info

  • Per G. Fredriksson
  • Xenia Matschke
  • Jenny Minier

Abstract

We provide a theory of trade policy determination that incorporates the protectionist bias inherent in majoritarian systems, suggested by Grossman and Helpman (2005). The prediction that emerges is that in majoritarian systems, the majority party favors industries located disproportionately in majority districts. We test this prediction using U.S. data on tariffs, Congressional campaign contributions, and industry location in districts represented by the majority party over the period 1989-97. We find evidence of a significant majority bias in trade policy: the benefit to being represented by the majority party appears at least as large in magnitude as the benefit to lobbying.

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File URL: http://www.uni-trier.de/fileadmin/fb4/prof/VWL/EWF/Research_Papers/2011-01.pdf
File Function: First version, 2011
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Bibliographic Info

Paper provided by University of Trier, Department of Economics in its series Research Papers in Economics with number 2011-01.

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Length: 35 pages
Date of creation: 2011
Date of revision:
Handle: RePEc:trr:wpaper:201101

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Related research

Keywords: trade policy; majority bias; political economy;

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Cited by:
  1. Levent Celik & Bilgehan Karabay & John McLaren, 2011. "Trade Policy Making in a Model of Legislative Bargaining," NBER Working Papers 17262, National Bureau of Economic Research, Inc.
  2. Giacomo A. M. Ponzetto, 2011. "Heterogeneous Information and Trade Policy," 2011 Meeting Papers, Society for Economic Dynamics 189, Society for Economic Dynamics.

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