Lobbying and Agricultural Trade Policy in the United States

This article studies whether political campaign contributions influence agricultural protection in the United States in the manner suggested by the political economy model of Grossman and Helpman (1994). This is the first attempt to test this model using agricultural data. We test the model using a detailed cross-sectional data set of agricultural protection, subsidies, and PAC contributions in the late 1990s. The model is qualitatively affirmed by the data. We make a novel attempt to solve a puzzle about the model's quantitative implications, also found in recent studies. This solution makes the simple model consistent with the complicated decision-making process in real-world government. The results imply the underpinnings of a political economy equilibrium that will be hard to dislodge.This article has benefited greatly from the insightful comments of the editor and two anonymous referees. We thank Marcelo Olarreaga for access to valuable data on agricultural protection and subsidies. We accept responsibility for any remaining errors. The views expressed are our own and should not be attributed to the World Bank.