Political Reform and Trade Policy
AbstractThe 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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- Hillman, Arye L & Ursprung, Heinrich W, 1988. "Domestic Politics, Foreign Interests, and International Trade Policy," American Economic Review, American Economic Association, vol. 78(4), pages 719-45, September.
- Mayer, Wolfgang, 1984. "Endogenous Tariff Formation," American Economic Review, American Economic Association, vol. 74(5), pages 970-85, December.
- 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.
- 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, 03.
- repec:cup:cbooks:9780521362474 is not listed on IDEAS
- Grossman, G.M. & Helpman, E., 1992.
"Protection for Sale,"
21-92, Tel Aviv.
- Grossman, Gene & Helpman, Elhanan, 1993. "Protection for Sale," CEPR Discussion Papers 827, C.E.P.R. Discussion Papers.
- Gene M. Grossman & Elhanan Helpman, 1992. "Protection For Sale," NBER Working Papers 4149, National Bureau of Economic Research, Inc.
- Grossman, G.M. & Helpman, E., 1992. "Protection for Sale," Papers 162, Princeton, Woodrow Wilson School - Public and International Affairs.
- repec:cup:cbooks:9780521377003 is not listed on IDEAS
- Rodrik, Dani, 1986. "Tariffs, subsidies, and welfare with endogenous policy," Journal of International Economics, Elsevier, vol. 21(3-4), pages 285-299, November.
- Baron, David P, 1989. "Service-Induced Campaign Contributions and the Electoral Equilibrium," The Quarterly Journal of Economics, MIT Press, vol. 104(1), pages 45-72, February.
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