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Inequity Aversion and the International Distribution of Trade Protection

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  • Xiaobo Lü
  • Kenneth Scheve
  • Matthew J. Slaughter

Abstract

One important puzzle in international political economy is why lower‐earning and less‐skilled intensive industries tend to receive relatively high levels of trade protection. This pattern of protection holds across countries with vastly different economic and political characteristics and is not well accounted for in existing political economy models. We propose and model one possible explanation: that individual inequity aversion leads to systematic differences in support for trade protection across industries. We conduct original survey experiments in China and the United States and provide strong evidence that individual policy opinions about sector‐specific trade protection depend on the earnings of workers in the sector. We also present structural estimates that advantageous and disadvantageous inequality influence support for trade protection in the two countries.

Suggested Citation

  • Xiaobo Lü & Kenneth Scheve & Matthew J. Slaughter, 2012. "Inequity Aversion and the International Distribution of Trade Protection," American Journal of Political Science, John Wiley & Sons, vol. 56(3), pages 638-654, July.
    • Handle: RePEc:wly:amposc:v:56:y:2012:i:3:p:638-654
    DOI: 10.1111/j.1540-5907.2012.00589.x
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    Cited by:

    1. Bruton, Garry & Sutter, Christopher & Lenz, Anna-Katharina, 2021. "Economic inequality – Is entrepreneurship the cause or the solution? A review and research agenda for emerging economies," Journal of Business Venturing, Elsevier, vol. 36(3).
    2. Egger, Hartmut & Fischer, Christian, 2020. "Increasing resistance to globalization: The role of trade in tasks," European Economic Review, Elsevier, vol. 126(C).
    3. Blanchard, Emily & Willmann, Gerald, 2016. "Trade, education, and the shrinking middle class," Journal of International Economics, Elsevier, vol. 99(C), pages 263-278.
    4. Wenshou Yan & Kaixing Huang, 2022. "Geographic politics, loss aversion and trade policy: The case of cotton in China," The World Economy, Wiley Blackwell, vol. 45(9), pages 2854-2881, September.
    5. Thiemo Fetzer & Carlo Schwarz, 2021. "Tariffs and Politics: Evidence from Trump’s Trade Wars," The Economic Journal, Royal Economic Society, vol. 131(636), pages 1717-1741.
    6. Griffin, John & Nickerson, David & Wozniak, Abigail, 2012. "Racial differences in inequality aversion: Evidence from real world respondents in the ultimatum game," Journal of Economic Behavior & Organization, Elsevier, vol. 84(2), pages 600-617.
    7. María Angélica Arbeláez & Sebastián Higuera & Roberto Steiner & Sandra Zuluaga, 2018. "Protecting “sensitive” agricultural products in Colombia : a political economy approach," Coyuntura Económica, Fedesarrollo, vol. 48(1-2), pages 153-205, December.
    8. repec:gnv:wpaper:unige:77631 is not listed on IDEAS
    9. Nils D Steiner, 2018. "Attitudes towards the Transatlantic Trade and Investment Partnership in the European Union: The treaty partner heuristic and issue attention," European Union Politics, , vol. 19(2), pages 255-277, June.
    10. Ohmura, Tamaki & Creutzburg, Leonard, 2021. "Guarding the For(es)t: Sustainable economy conflicts and stakeholder preference of policy instruments," Forest Policy and Economics, Elsevier, vol. 131(C).
    11. Chun-Fang Chiang & Jason M. Kuo & Megumi Naoi & Jin-Tan Liu, 2020. "What Do Voters Learn from Foreign News? Emulation, Backlash, and Public Support for Trade Agreements," NBER Working Papers 27497, National Bureau of Economic Research, Inc.
    12. Nguyen, Quynh, 2015. "“Mind the Gap”: Inequality Aversion and Mass Support for Protectionism," Papers 838, World Trade Institute.
    13. Rickard, Stephanie, 2022. "Incumbents beware: the impact of offshoring on elections," LSE Research Online Documents on Economics 107517, London School of Economics and Political Science, LSE Library.
    14. Barbara Dluhosch & Daniel Horgos, 2019. "International Competition Intensified: Job Satisfaction Sacrificed?," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 143(2), pages 479-504, June.
    15. Céline Carrère & Anja Grujovic & Frédéric Robert-Nicoud, 2020. "Trade and Frictional Unemployment in the Global Economy," Journal of the European Economic Association, European Economic Association, vol. 18(6), pages 2869-2921.
    16. Zhang, Zhe & Zhang, Xu & Putterman, Louis, 2019. "Trust and cooperation at a confluence of worlds: An experiment in Xinjiang, China," Journal of Economic Behavior & Organization, Elsevier, vol. 161(C), pages 128-144.
    17. Barbara Dluhosch, 2021. "The role of perceptions about trade and inequality in the backlash against globalization," SN Business & Economics, Springer, vol. 1(12), pages 1-24, December.
    18. Amanda Kennard, 2021. "My Brother’s Keeper: Other-regarding preferences and concern for global climate change," The Review of International Organizations, Springer, vol. 16(2), pages 345-376, April.
    19. Barbara Dluhosch, 2021. "The Gender Gap in Globalization and Well-Being," Applied Research in Quality of Life, Springer;International Society for Quality-of-Life Studies, vol. 16(1), pages 351-378, February.
    20. Barbara Dluhosch, 2018. "Trade, Inequality, and Subjective Well-Being: Getting at the Roots of the Backlash Against Globalization," LIS Working papers 741, LIS Cross-National Data Center in Luxembourg.
    21. Moon, Wanki & Saldias, Gabriel Pino, 2013. "Public Preferences about Agricultural Protectionism in the US," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150718, Agricultural and Applied Economics Association.
    22. Linde, Jona & Sonnemans, Joep, 2015. "Decisions under risk in a social and individual context: The limits of social preferences?," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 56(C), pages 62-71.
    23. Rickard, Stephanie, 2022. "Economic geography, politics, and the world trade regime," LSE Research Online Documents on Economics 113857, London School of Economics and Political Science, LSE Library.

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