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Political Reform and Trade Policy

Author

Listed:
  • Riezman, R.

    (University of Iowa)

  • Wilson, J.D.

Abstract

The welfare effects of partial restrictions on political competition are investigated in a model in which two candidates receive campaign contributions from import-competing industries in return for tariff protection. Ceilings on allowable contributions per industry may be welfare-worsening, particularly if the "contributor elasticity" is high, because they induce candidates to seek additional contributors. Restrictions that reduce the number of industries allowed to contribute may also worsen welfare, because candidates respond by increasing contributions (and tariff protection) for each active contributor. The results suggest that the ability of candidates to circumvent partial restrictions may eliminate any potential benefits.
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Suggested Citation

  • Riezman, R. & Wilson, J.D., 1993. "Political Reform and Trade Policy," Working Papers 93-09, University of Iowa, Department of Economics.
    • Handle: RePEc:uia:iowaec:93-09
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    Citations

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    Cited by:

    1. Persson, Torsten & Tabellini, Guido, 2002. "Political economics and public finance," Handbook of Public Economics, in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 3, chapter 24, pages 1549-1659, Elsevier.
    2. Wolfgang Mayer & Jun Li, 1994. "Interest Groups, Electoral Competition, And Probabilistic Voting For Trade Policies," Economics and Politics, Wiley Blackwell, vol. 6(1), pages 59-77, March.
    3. Felix Oberholzer-Gee & Dennis A. Yao, 2018. "Integrated Strategy: Residual Market and Exchange Imperfections as the Foundation of Sustainable Competitive Advantage," Strategy Science, INFORMS, vol. 3(2), pages 463-480, June.
    4. 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.
    5. Cotton, Christopher, 2012. "Pay-to-play politics: Informational lobbying and contribution limits when money buys access," Journal of Public Economics, Elsevier, vol. 96(3), pages 369-386.
    6. Thomas Stratmann, 2005. "Some talk: Money in politics. A (partial) review of the literature," Public Choice, Springer, vol. 124(1), pages 135-156, July.
    7. Cotton, Christopher & Li, Cheng, 2016. "Clueless Politicians," Queen's Economics Department Working Papers 274667, Queen's University - Department of Economics.
    8. Christopher Cotton, 2010. "Pay-to-Play Politics: Informational lobbying and campaign finance reform when contributions buy access," Working Papers 2010-22, University of Miami, Department of Economics.
    9. 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.
    10. Wolf Wagner & Sylvester Eijffinger, 2008. "Efficiency of capital taxation in an open economy: tax competition versus tax exportation," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 15(6), pages 637-646, December.
    11. kishore gawande & pravin krishna, 2005. "The Political Economy of Trade Policy: Empirical Approaches," International Trade 0503003, University Library of Munich, Germany.
    12. Peter Grajzl, 2011. "A property rights approach to legislative delegation," Economics of Governance, Springer, vol. 12(2), pages 177-200, June.

    More about this item

    Keywords

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    JEL classification:

    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

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