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Political Ideology And Endogenous Trade Policy: An Empirical Investigation

In: The Political Economy of Trade Policy Theory, Evidence and Applications

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  • Pushan Dutt
  • Devashish Mitra

Abstract

In this paper, we investigate empirically how government ideology affects trade policy. The prediction of a partisan, ideology-based model (within a two-sector, two-factor Heckscher-Ohlin framework) is that left-wing governments will adopt more protectionist trade policies in capital-rich countries, but adopt more pro-trade policies in labor-rich countries, than right-wing ones. The data strongly support this prediction in a very robust fashion. There is some evidence that this relationship may hold better in democracies than in dictatorships, though the magnitude of the partisan effect seems stronger in dictatorships.

Suggested Citation

  • Pushan Dutt & Devashish Mitra, 2016. "Political Ideology And Endogenous Trade Policy: An Empirical Investigation," World Scientific Book Chapters, in: The Political Economy of Trade Policy Theory, Evidence and Applications, chapter 5, pages 95-108, World Scientific Publishing Co. Pte. Ltd..
  • Handle: RePEc:wsi:wschap:9789814569156_0005
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    More about this item

    Keywords

    Political Economy; Protection; Trade Policy; Tariffs; Subsidies; Reciprocal Trade Liberalization; Unilateral Trade Liberalization; Unilateralism; Reciprocity; Lobbying; Median Voter Models;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade

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