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Why Legislators are Protectionists: the Role of Majoritarian Voting in Setting Tariffs

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  • Willmann, Gerald

Abstract

Based on the observation that industries are often geographically concentrated, this paper proposes a new political economy model of trade protection. We associate the sectors of a specific factors model with electoral districts populated by continua of heterogeneous voters who differ in their relative factor endowments. We show how strategic delegation leads each district to elect a representative who is more protectionist than the median voter. The legislature formed by these representatives then sets tariffs that are strictly positive. Introducing additional policy instruments reveals a trade-off between efficiency and regional targetability. --

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Bibliographic Info

Paper provided by Christian-Albrechts-University of Kiel, Department of Economics in its series Economics Working Papers with number 2003,10.

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Date of creation: 2003
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Handle: RePEc:zbw:cauewp:1049

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Related research

Keywords: trade policy; political economy; representative democracy;

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References

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  17. Devashish Mitra, 1999. "Endogenous Lobby Formation and Endogenous Protection: A Long-Run Model of Trade Policy Determination," American Economic Review, American Economic Association, vol. 89(5), pages 1116-1134, December.
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Cited by:
  1. Dimitra Petropoulou & Mirabelle Muuls, 2007. "A Swing-State Theory of Trade Protection in the Electoral College," Economics Series Working Papers 372, University of Oxford, Department of Economics.
  2. Hatfield, John, 2006. "Federalism, Taxation, and Economic Growth," Research Papers 1929, Stanford University, Graduate School of Business.

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