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Rents, Votes, and Protection: Explaining the Structure of Trade Barriers Across Industries

  • Scott Bradford

    (Brigham Young University)

This paper develops a model of the structure of protection across industries. We model five types of agents: policy makers, producers, importers, workers, and consumers. The model implies that protection increases with workforce size and decreases with lobbying costs. The effects of both output and imports are ambiguous. We test the model with US data, including new measures of protection, and confirm most of its implications. We do not find evidence that protection increases with output. The empirical results also suggest that policy makers weight campaign contributions about 12 per cent more heavily than national income.

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Paper provided by Econometric Society in its series Econometric Society World Congress 2000 Contributed Papers with number 1717.

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Date of creation: 01 Aug 2000
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Handle: RePEc:ecm:wc2000:1717
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  1. Douglas R. Nelson, 1994. "The Political-Economy of U.S. Automobile Protection," NBER Working Papers 4746, National Bureau of Economic Research, Inc.
  2. Jagdish N. Bhagwati, 1982. "Shifting Comparative Advantage, Protectionist Demands, and Policy Response," NBER Chapters, in: Import Competition and Response, pages 151-196 National Bureau of Economic Research, Inc.
  3. J. Michael Finger & Ann Harrison, 1996. "The MFA Paradox: More Protection and More Trade?," NBER Chapters, in: The Political Economy of American Trade Policy, pages 197-260 National Bureau of Economic Research, Inc.
  4. Gene M. Grossman & Elhanan Helpman, 1992. "Protection For Sale," NBER Working Papers 4149, National Bureau of Economic Research, Inc.
  5. Giovanni Maggi & Andres Rodriguez-Clare, 1998. "Import Peneteration and the Politics of Trade Protection," NBER Working Papers 6711, National Bureau of Economic Research, Inc.
  6. Phillip Swagel, 1995. "Import prices and the competing goods effect," International Finance Discussion Papers 508, Board of Governors of the Federal Reserve System (U.S.).
  7. Anne O. Krueger, 1996. "The Political Economy of American Trade Policy," NBER Books, National Bureau of Economic Research, Inc, number krue96-1, October.
  8. Rodrik, Dani, 1986. "Tariffs, subsidies, and welfare with endogenous policy," Journal of International Economics, Elsevier, vol. 21(3-4), pages 285-299, November.
  9. Rodrik, Dani, 1994. "What does the Political Economy Literature on Trade Policy (Not) Tell Us That We Ought to Know?," CEPR Discussion Papers 1039, C.E.P.R. Discussion Papers.
  10. Robert Feenstra, 2003. "Integration Of Trade And Disintegration Of Production In The Global Economy," Working Papers 986, University of California, Davis, Department of Economics.
  11. Yoko Sazanami & Shujiro Urata & Hiroki Kawai, 1995. "Measuring the Costs of Protection in Japan," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 32, May.
  12. Godek, Paul E, 1985. "Industry Structure and Redistribution through Trade Restrictions," Journal of Law and Economics, University of Chicago Press, vol. 28(3), pages 687-703, October.
  13. Pinelopi Koujianou Goldbe & Giovanni Maggi, 1997. "Protection for Sale: An Empirical Investigation," NBER Working Papers 5942, National Bureau of Economic Research, Inc.
  14. Revenga, Ana L, 1992. "Exporting Jobs? The Impact of Import Competition on Employment and Wages in U.S. Manufacturing," The Quarterly Journal of Economics, MIT Press, vol. 107(1), pages 255-84, February.
  15. Alan V. Deardorff & Robert M. Stern, 1984. "The Effects of the Tokyo Round on the Structure of Protection," NBER Chapters, in: The Structure and Evolution of Recent U.S. Trade Policy, pages 361-388 National Bureau of Economic Research, Inc.
  16. S. Lael Brainard & Thierry Verdier, 1993. "The Political Economy of Declining Industries: Senescent Industry Collapse Revisited," NBER Working Papers 4606, National Bureau of Economic Research, Inc.
  17. G. K. Helleiner, 1977. "The Political Economy of Canada's Tariff Structure: An Alternative Model," Canadian Journal of Economics, Canadian Economics Association, vol. 10(2), pages 318-26, May.
  18. Goldstein, Judith, 1988. "Ideas, institutions, and American trade policy," International Organization, Cambridge University Press, vol. 42(01), pages 179-217, December.
  19. Richardson, Martin, 1993. "Endogenous protection and trade diversion," Journal of International Economics, Elsevier, vol. 34(3-4), pages 309-324, May.
  20. Gary Clyde Hufbauer & Kimberly Ann Elliott, 1994. "Measuring the Costs of Protection in the United States," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 77, May.
  21. Edward E. Leamer, 1988. "Measures of Openness," NBER Chapters, in: Trade Policy Issues and Empirical Analysis, pages 145-204 National Bureau of Economic Research, Inc.
  22. Kishore Gawande, 1998. "Comparing Theories Of Endogenous Protection: Bayesian Comparison Of Tobit Models Using Gibbs Sampling Output," The Review of Economics and Statistics, MIT Press, vol. 80(1), pages 128-140, February.
  23. Michael M. Knetter, 1994. "Why are Retail Prices in Japan so High?: Evidence from German Export Prices," NBER Working Papers 4894, National Bureau of Economic Research, Inc.
  24. John Douglas Wilson, 1990. "Are Efficiency Improvements In Government Transfer Policies Self-Defeating In Political Equilibrium?," Economics and Politics, Wiley Blackwell, vol. 2(3), pages 241-258, November.
  25. Robert E. Baldwin, 1989. "Measuring Nontariff Trade Policies," NBER Working Papers 2978, National Bureau of Economic Research, Inc.
  26. Vernon Roningen & Alexander Yeats, 1976. "Nontariff distortions of international trade: Some preliminary empirical evidence," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 112(4), pages 613-625, December.
  27. Alan V. Deardorff & Robert M. Stern, 1997. "Measurement of Non-Tariff Barriers," OECD Economics Department Working Papers 179, OECD Publishing.
  28. Noland, Marcus, 1995. "Why are prices in Japan so high?," Japan and the World Economy, Elsevier, vol. 7(3), pages 255-261, September.
  29. Richard E. Caves, 1976. "Economic Models of Political Choice: Canada's Tariff Structure," Canadian Journal of Economics, Canadian Economics Association, vol. 9(2), pages 278-300, May.
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