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The Demand for Protectionism: Democracy, Import Elasticity, and Trade Barriers

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  • Timothy M. Peterson
  • Cameron G. Thies

Abstract

Numerous studies suggest that democracies employ lower trade barriers than nondemocracies. In this article, we examine the conditioning role that the elasticity of import demand at the commodity level plays on the relationship between democracy and import barriers. Beginning with the assumption that democracies are more responsive than nondemocracies to the preferences of mass publics, we demonstrate that the value of free trade as a public good depends on the elasticity of import demand. When import demand for a given commodity is inelastic, trade barriers are more harmful to consumers; as such, democracies will employ lower trade barriers than nondemocracies. However, as import demand becomes more elastic, publics find it easier to adjust to higher prices; as a result, the difference in imposed trade barriers by regime type decreases. We find support for this argument in statistical analyses of crosssectional data covering 4,656 commodities imported by 73 countries Furthermore, we find that democracies raise higher trade barriers than nondemocracies on commodities for which import demand is very elastic.

Suggested Citation

  • Timothy M. Peterson & Cameron G. Thies, 2014. "The Demand for Protectionism: Democracy, Import Elasticity, and Trade Barriers," International Interactions, Taylor & Francis Journals, vol. 40(1), pages 103-126, January.
    • Handle: RePEc:taf:ginixx:v:40:y:2014:i:1:p:103-126
    DOI: 10.1080/03050629.2013.863191
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    1. James E. Anderson & J. Peter Neary, 2005. "Measuring the Restrictiveness of International Trade Policy," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262012200, December.
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    Cited by:

    1. Julia Grübler & Mahdi Ghodsi & Robert Stehrer, 2022. "Import demand elasticities revisited," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 31(1), pages 46-74, January.
    2. Leudjou, Roland, 2021. "Assessing the impacts of eliminating Non-Tariff Barriers in the framework of the African Continental Free Trade Area on Cameroons economy," Conference papers 330231, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.

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