Discretion, Lobbying, and Political Influence in Models of Trade Policy
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.
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Volume (Year): 8 (2005)
Issue (Month): 3 ()
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