The Value of Trade Agreements in the Presence of Political Pressures
An argument often heard in favor of trade agreements is that they provide a way for a government to credibly distance itself from the domestic special interest groups who lobby for protection; the idea is that, by committing to free trade, a government may be able to foreclse political pressures at home. In this paper we develop a dynamic, small-country model in which factors are sector-specific in the short run but mobile across sectors in the long run, and show that the rents derived from the political process may not compensate the government for the welfare distortions caused by protection.
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|Date of creation:||1996|
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- Grossman, Gene M & Helpman, Elhanan, 1994.
"Protection for Sale,"
American Economic Review,
American Economic Association, vol. 84(4), pages 833-850, September.
- Grossman, G.M. & Helpman, E., 1992. "Protection for Sale," Papers 162, Princeton, Woodrow Wilson School - Public and International Affairs.
- Grossman, Gene & Helpman, Elhanan, 1993. "Protection for Sale," CEPR Discussion Papers 827, C.E.P.R. Discussion Papers.
- Grossman, G.M. & Helpman, E., 1992. "Protection for Sale," Papers 21-92, Tel Aviv.
- Gene M. Grossman & Elhanan Helpman, 1992. "Protection For Sale," NBER Working Papers 4149, National Bureau of Economic Research, Inc.
- Staiger, Robert W & Tabellini, Guido, 1987. "Discretionary Trade Policy and Excessive Protection," American Economic Review, American Economic Association, vol. 77(5), pages 823-837, December. Full references (including those not matched with items on IDEAS)
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