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Collusion, Collective Action and Protection: Theory and Evidence

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  • Richard Damania
  • Per Fredriksson

    ()

  • Thomas Osang

Abstract

This paper provides a novel explanation forthe formation of protectionist lobby groupsin imperfectly competitive sectors. Thelevel of collusion is shown to be a crucialdeterminant of the ability of firms tosustain lobbying. We show that greatercollusion reduces firm contributionsto tariff lobbying, when the governmentvalues welfare sufficiently and thecross-price elasticity between the domesticand foreign goods is sufficiently high. The empirical evidence from the U.S.supports the theory. Greater collusionreduces the level of PAC contributions. Copyright Kluwer Academic Publishers 2004

Suggested Citation

  • Richard Damania & Per Fredriksson & Thomas Osang, 2004. "Collusion, Collective Action and Protection: Theory and Evidence," Public Choice, Springer, vol. 121(3), pages 279-308, February.
  • Handle: RePEc:kap:pubcho:v:121:y:2004:i:3:p:279-308
    DOI: 10.1007/s11127-004-1679-x
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    References listed on IDEAS

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