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Interests, Institutions, and Ideology in Securing Policy Change: The Republican Conversion to Trade Liberalization after Smoot-Hawley

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  • Irwin, Douglas A
  • Kroszner, Randall S

Abstract

This paper investigates how changes in both institutional incentives and economic interests are important for securing durable changes in economic policy. We study how bipartisan support developed to sustain the Reciprocal Trade Agreements Act (RTAA) of 1934, which fundamentally transformed U.S. trade policy. The durability of this change was achieved only when the Republicans, long-time supporters of high tariffs who originally vowed to repeal the RTAA, began to support this Democratic initiative in the 1940s. We find little evidence of an ideological shift among Republicans, but rather an increased sensitivity to export interests for which the institutional structure of the RTAA itself may have been responsible. We conclude that the combination of greater export opportunities and the institutional change that strengthened exporters' lobbying position was required to bring about Republican support for trade liberalization. Copyright 1999 by the University of Chicago.

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  • Irwin, Douglas A & Kroszner, Randall S, 1999. "Interests, Institutions, and Ideology in Securing Policy Change: The Republican Conversion to Trade Liberalization after Smoot-Hawley," Journal of Law and Economics, University of Chicago Press, vol. 42(2), pages 643-673, October.
  • Handle: RePEc:ucp:jlawec:v:42:y:1999:i:2:p:643-73
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    Cited by:

    1. Randall S. Kroszner, 1999. "Is the Financial System Politically Independent? Perspectives on the Political Economy of Banking and Financial Regulation," CRSP working papers 492, Center for Research in Security Prices, Graduate School of Business, University of Chicago.
    2. Alberto E. Chong & Mark Gradstein, 2007. "On the Determinants and Effects of Political Influence," IDB Publications (Working Papers) 3347, Inter-American Development Bank.
    3. Celik, Levent & Karabay, Bilgehan & McLaren, John, 2013. "Trade policy-making in a model of legislative bargaining," Journal of International Economics, Elsevier, vol. 91(2), pages 179-190.
    4. Douglas A. Irwin, 2008. "Antebellum Tariff Politics: Regional Coalitions and Shifting Economic Interests," Journal of Law and Economics, University of Chicago Press, vol. 51(4), pages 715-741, November.
    5. Alberto Chong & Mark Gradstein, 2007. "Sobre los determinantes y efectos de la influencia de politica (On the Determinants and Effects of Political Influence)," Research Department Publications 4541, Inter-American Development Bank, Research Department.
    6. Randall S. Kroszner, 1999. "Is the Financial System Politically Independent? Perspectives on the Political Economy of Banking and Financial Regulation," University of Chicago - George G. Stigler Center for Study of Economy and State 151, Chicago - Center for Study of Economy and State.
    7. Randall S. Kroszner & Philip E. Strahan, 2000. "Obstacles to Optimal Policy: The Interplay of Politics and Economics in Shaping Bank Supervision and Regulation Reforms," CRSP working papers 512, Center for Research in Security Prices, Graduate School of Business, University of Chicago.
    8. Kono Daniel Y., 2011. "Insuring Free Trade: Unemployment Insurance and Trade Policy," Business and Politics, De Gruyter, vol. 13(3), pages 1-31, October.
    9. Jo Seldeslachts, 2002. "Interactions Between Product and Labour Market Reforms," UFAE and IAE Working Papers 519.02, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
    10. Douglas A. Irwin, 2000. "How Did the United States Become a Net Exporter of Manufactured Goods?," NBER Working Papers 7638, National Bureau of Economic Research, Inc.
    11. J. Broz, 2011. "The United States Congress and IMF financing, 1944–2009," The Review of International Organizations, Springer, vol. 6(3), pages 341-368, September.
    12. Clarke, George R G & Cull, Robert, 2002. "Political and Economic Determinants of the Likelihood of Privatizing Argentine Public Banks," Journal of Law and Economics, University of Chicago Press, vol. 45(1), pages 165-197, April.
    13. Bradley A. Hansen & Mary Eschelbach Hansen, 2005. "The Role of Path Dependence in the Development of U.S. Bankruptcy Law, 1880-1938," Working Papers 2005-14, American University, Department of Economics.

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