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Four Simple Tests of Campaign Contributions and Trade Policy Preferences

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  • Eugene Beaulieu
  • Christopher Magee

Abstract

This paper uses campaign contribution data to examine trade policy preferences among political action committees. With perfect factor mobility, as the Heckscher–Ohlin (HO) model assumes, interest group trade positions should depend on their factor of production but not on their industry. We show, consistent with the 2 × 2 HO model, that capital groups consistently back representatives supporting trade liberalization while labor groups favor protectionists. Unlike previous work, we also measure the variation in trade policy preferences within capital and labor groups. We find evidence that the industry net export position significantly affects labor unions' trade policy preferences. Industry characteristics have no impact on capital group lobbying. The former result suggests that empirical analyses of labor PAC contributions that exclude industry characteristics may be misspecified.

Suggested Citation

  • Eugene Beaulieu & Christopher Magee, 2004. "Four Simple Tests of Campaign Contributions and Trade Policy Preferences," Economics and Politics, Wiley Blackwell, vol. 16(2), pages 163-187, July.
    • Handle: RePEc:bla:ecopol:v:16:y:2004:i:2:p:163-187
    DOI: 10.1111/j.1468-0343.2004.00136.x
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    Cited by:

    1. Swati Dhingra, 2014. "Reconciling Observed Tariffs and the Median Voter Model," Economics and Politics, Wiley Blackwell, vol. 26(3), pages 483-504, November.
    2. Malcolm, Michael, 2017. "Do local exports impact congressional voting on free trade agreements?," Economics Letters, Elsevier, vol. 154(C), pages 31-34.
    3. Chapda Nana, Guy & Larue, Bruno & Gervais, Jean-Philippe, 2012. "Regional integration and dynamic adjustments: Evidence from gross national product functions for Canada and the United States," The North American Journal of Economics and Finance, Elsevier, vol. 23(2), pages 246-264.
    4. Helen V. Milner & Dustin H. Tingley, 2010. "The Political Economy Of U.S. Foreign Aid: American Legislators And The Domestic Politics Of Aid," Economics and Politics, Wiley Blackwell, vol. 22(2), pages 200-232, July.
    5. Marco de Pinto & Jochen Michaelis, 2014. "The labor market effects of trade unions Layard meets Melitz," MAGKS Papers on Economics 201418, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    6. Blanchard, Emily & Willmann, Gerald, 2011. "Escaping a protectionist rut: Policy mechanisms for trade reform in a democracy," Journal of International Economics, Elsevier, vol. 85(1), pages 72-85, September.
    7. Im Hyejoon & Sung Hankyoung, 2011. "Empirical Analyses of U.S. Congressional Voting on Recent FTA," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 11(1), pages 1-37, December.
    8. Hyejoon Im & Hankyoung Sun, 2008. "Empirical Analyses of U.S. Congressional Voting on Recent FTA Bills," Governance Working Papers 22992, East Asian Bureau of Economic Research.
    9. Kim, JunYun & Magee, Stephen & Lee, Hongshik, 2023. "Capitalization of the economy and labor return: How does lobbying affect resource allocation?," Economic Modelling, Elsevier, vol. 120(C).
    10. Christopher Sean Patrick Magee, 2010. "Would NAFTA have been Approved by the House of Representatives under President Bush? Presidents, Parties, and Trade Policy," Review of International Economics, Wiley Blackwell, vol. 18(2), pages 382-395, May.
    11. Dhingra, Swati, 2006. "Re-examination of the Mayer Median Voter Model of Trade Policy," MPRA Paper 892, University Library of Munich, Germany, revised 14 Nov 2006.
    12. Xiaosong Wang & Huan Wu & Le Li, 2022. "Trade policy and return on capital: An empirical analysis based on China's antidumping," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 27(1), pages 865-892, January.

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