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Discretion, Lobbying, and Political Influence in Models of Trade Policy

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  • Michael Hoffman

Abstract

Most models of trade policy determination and rent-seeking abstract from the problem of commitment: both the politician's commitment to implement a policy and the lobbyist's commitment to contribute to the politician. This article shows that the commitment problem is a static prisoner's dilemma, in which neither lobbying nor inefficient policies occur. The only way to rationalize the existence of lobbying and protection within a finite time horizon is in a repeated game with uncertain duration. I construct a model in which the uncertainty comes from periodic elections. The model has implications for redistribution and political influence across political systems and institutions.

Suggested Citation

  • Michael Hoffman, 2005. "Discretion, Lobbying, and Political Influence in Models of Trade Policy," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 8(3), pages 175-188.
  • Handle: RePEc:taf:jpolrf:v:8:y:2005:i:3:p:175-188
    DOI: 10.1080/13841280500181650
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    References listed on IDEAS

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    Cited by:

    1. Hadjikhani, Amjad & Lee, Joong-Woo & Ghauri, Pervez N., 2008. "Network view of MNCs' socio-political behavior," Journal of Business Research, Elsevier, vol. 61(9), pages 912-924, September.

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