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Lobby Interaction and Trade Policy


  • Tatyana Chesnokova

    () (School of Economics, University of Adelaide)


The paper introduces lobby interaction in the ''protection for sale'' framework. Special interest groups provide unconditional contributions where the marginal contribution of a lobby is decreasing in the total sum collected by the government. In contrast to the ''protection for sale'' model, for a given proportion of capital owners in the organized sectors, an increase in the number of lobbies has an impact on trade policy. It is also shown that an increase in the number of lobbies has two opposite effects on each lobby's contribution: a competition effect which lowers a lobby's contribution and a political influence effect which tends to increase its contribution.

Suggested Citation

  • Tatyana Chesnokova, 2010. "Lobby Interaction and Trade Policy," School of Economics Working Papers 2010-04, University of Adelaide, School of Economics.
  • Handle: RePEc:adl:wpaper:2010-04

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    References listed on IDEAS

    1. Xenia Matschke & Shane M. Sherlund, 2006. "Do Labor Issues Matter in the Determination of U.S. Trade Policy? An Empirical Reevaluation," American Economic Review, American Economic Association, vol. 96(1), pages 405-421, March.
    2. Grossman, Gene M & Helpman, Elhanan, 1994. "Protection for Sale," American Economic Review, American Economic Association, vol. 84(4), pages 833-850, September.
    3. Cotton, Christopher, 2009. "Should we tax or cap political contributions? A lobbying model with policy favors and access," Journal of Public Economics, Elsevier, vol. 93(7-8), pages 831-842, August.
    4. repec:cup:apsrev:v:89:y:1995:i:03:p:566-581_09 is not listed on IDEAS
    5. Bombardini, Matilde, 2008. "Firm heterogeneity and lobby participation," Journal of International Economics, Elsevier, vol. 75(2), pages 329-348, July.
    6. Drazen, Allan & Limao, Nuno & Stratmann, Thomas, 2007. "Political contribution caps and lobby formation: Theory and evidence," Journal of Public Economics, Elsevier, vol. 91(3-4), pages 723-754, April.
    7. Stephen Ansolabehere & John M. de Figueiredo & James M. Snyder Jr, 2003. "Why is There so Little Money in U.S. Politics?," Journal of Economic Perspectives, American Economic Association, vol. 17(1), pages 105-130, Winter.
    8. Lohmann, Susanne, 1995. "Information, Access, and Contributions: A Signaling Model of Lobbying," Public Choice, Springer, vol. 85(3-4), pages 267-284, December.
    9. Stephen Ansolabehere & John M. de Figueiredo & James M. Snyder, 2003. "Why Is There So Little Money in Politics?," NBER Working Papers 9409, National Bureau of Economic Research, Inc.
    10. Austen-Smith, David, 1998. "Allocating Access for Information and Contributions," Journal of Law, Economics, and Organization, Oxford University Press, vol. 14(2), pages 277-303, October.
    11. Milyo Jeffrey & Primo David & Groseclose Timothy, 2000. "Corporate PAC Campaign Contributions in Perspective," Business and Politics, De Gruyter, vol. 2(1), pages 1-15, April.
    12. Gene M. Grossman & Elhanan Helpman, 1996. "Electoral Competition and Special Interest Politics," Review of Economic Studies, Oxford University Press, vol. 63(2), pages 265-286.
    13. Milyo, Jeffrey & Primo, David & Groseclose, Timothy, 2000. "Corporate PAC Campaign Contributions in Perspective," Business and Politics, Cambridge University Press, vol. 2(01), pages 75-88, April.
    14. B. Douglas Bernheim & Michael D. Whinston, 1986. "Menu Auctions, Resource Allocation, and Economic Influence," The Quarterly Journal of Economics, Oxford University Press, vol. 101(1), pages 1-31.
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    More about this item


    lobbying; interest groups; trade policy; protection for sale;

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior

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