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Trade Policy in Majoritarian Systems: The Case of the U.S

Author

Listed:
  • Per G. Fredriksson
  • Xenia Matschke
  • Jenny Minier

Abstract

We provide a theory of trade policy determination that incorporates the protectionist bias inherent in majoritarian systems, suggested by Grossman and Helpman (2005). The prediction that emerges is that in majoritarian systems, the majority party favors industries located disproportionately in majority districts. We test this prediction using U.S. data on tariffs, Congressional campaign contributions, and industry location in districts represented by the majority party over the period 1989-97. We find evidence of a significant majority bias in trade policy: the benefit to being represented by the majority party appears at least as large in magnitude as the benefit to lobbying.

Suggested Citation

  • Per G. Fredriksson & Xenia Matschke & Jenny Minier, 2011. "Trade Policy in Majoritarian Systems: The Case of the U.S," Research Papers in Economics 2011-01, University of Trier, Department of Economics.
  • Handle: RePEc:trr:wpaper:201101
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    File URL: http://www.uni-trier.de/fileadmin/fb4/prof/VWL/EWF/Research_Papers/2011-01.pdf
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    Cited by:

    1. Celik, Levent & Karabay, Bilgehan & McLaren, John, 2013. "Trade policy-making in a model of legislative bargaining," Journal of International Economics, Elsevier, vol. 91(2), pages 179-190.
    2. Giacomo A. M. Ponzetto, 2008. "Heterogeneous information and trade policy," Economics Working Papers 1296, Department of Economics and Business, Universitat Pompeu Fabra, revised Dec 2011.
    3. Xiangjun Ma & John McLaren, 2018. "A Swing-State Theorem, with Evidence," NBER Working Papers 24425, National Bureau of Economic Research, Inc.
    4. Lake, James, 2015. "Revisiting the link between PAC contributions and lobbying expenditures," European Journal of Political Economy, Elsevier, vol. 37(C), pages 86-101.
    5. repec:eee:jjieco:v:45:y:2017:i:c:p:51-66 is not listed on IDEAS

    More about this item

    Keywords

    trade policy; majority bias; political economy;

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

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