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Lobbying and agricultural trade policy in the United States

Author

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  • Gawande, Kishore
  • Hoekman, Bernard

Abstract

The authors study whether political campaign contributions influence agricultural protection in the United States in the manner suggested by the political economy model of Grossman and Helpman (1994). This is the first attempt to test this model using agricultural data. The authors test the model using a detailed cross-sectional data set of agricultural protection, subsidies, and political action committee (PAC) contributions in the late 1990s. The model is qualitatively affirmed by the data. They make a novel attempt to solve a puzzle about the model's quantitative implications, also found in recent studies. This solution makes the simple model consistent with the complicated decisionmaking process in real world government. The results imply the underpinnings of a political economy equilibrium that will be hard to dislodge.

Suggested Citation

  • Gawande, Kishore & Hoekman, Bernard, 2006. "Lobbying and agricultural trade policy in the United States," Policy Research Working Paper Series 3819, The World Bank.
  • Handle: RePEc:wbk:wbrwps:3819
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    References listed on IDEAS

    as
    1. Kishore Gawande & Usree Bandyopadhyay, 2000. "Is Protection for Sale? Evidence on the Grossman-Helpman Theory of Endogenous Protection," The Review of Economics and Statistics, MIT Press, vol. 82(1), pages 139-152, February.
    2. Olper, Alessandro, 1998. "Political Economy Determinants of Agricultural Protection Levels in EU Member States: An Empirical Investigation," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 25(4), pages 463-487.
    3. repec:wsi:wschap:9789814569156_0009 is not listed on IDEAS
    4. George J. Stigler, 1971. "The Theory of Economic Regulation," Bell Journal of Economics, The RAND Corporation, vol. 2(1), pages 3-21, Spring.
    5. kishore gawande & pravin krishna, 2005. "The Political Economy of Trade Policy: Empirical Approaches," International Trade 0503003, EconWPA.
    6. Theo Eicher & Thomas Osang, 2002. "Protection for Sale: An Empirical Investigation: Comment," American Economic Review, American Economic Association, vol. 92(5), pages 1702-1710, December.
    7. Rigoberto A. Lopez, 2001. "Campaign Contributions and Agricultural Subsidies," Economics and Politics, Wiley Blackwell, vol. 13(3), pages 257-279, November.
    8. Hiau Looi Kee & Alessandro Nicita & Marcelo Olarreaga, 2008. "Import Demand Elasticities and Trade Distortions," The Review of Economics and Statistics, MIT Press, vol. 90(4), pages 666-682, November.
    9. Bernard Hoekman & David Vines, 2007. "Multilateral trade cooperation: what next?," Oxford Review of Economic Policy, Oxford University Press, vol. 23(3), pages 311-334, Autumn.
    10. Grossman, Gene M & Helpman, Elhanan, 1994. "Protection for Sale," American Economic Review, American Economic Association, vol. 84(4), pages 833-850, September.
    11. James H. Stock & Motohiro Yogo, 2002. "Testing for Weak Instruments in Linear IV Regression," NBER Technical Working Papers 0284, National Bureau of Economic Research, Inc.
    12. Douglas Staiger & James H. Stock, 1997. "Instrumental Variables Regression with Weak Instruments," Econometrica, Econometric Society, vol. 65(3), pages 557-586, May.
    13. Phillip McCalman, 2004. "Protection for Sale and Trade Liberalization: an Empirical Investigation," Review of International Economics, Wiley Blackwell, vol. 12(1), pages 81-94, February.
    14. Gawande, Kishore, 2005. "The structure of lobbying and protection in U.S. agriculture," Policy Research Working Paper Series 3722, The World Bank.
    15. Giovanni Maggi & Pinelopi Koujianou Goldberg, 1999. "Protection for Sale: An Empirical Investigation," American Economic Review, American Economic Association, vol. 89(5), pages 1135-1155, December.
    16. Gardner, Bruce L, 1987. "Causes of U.S. Farm Commodity Programs," Journal of Political Economy, University of Chicago Press, vol. 95(2), pages 290-310, April.
    17. Stratmann, Thomas, 1992. "The Effects of Logrolling on Congressional Voting," American Economic Review, American Economic Association, vol. 82(5), pages 1162-1176, December.
    18. Glenn Parker & Suzanne Parker, 1998. "The economic organization of legislatures and how it affects congressional voting," Public Choice, Springer, vol. 95(1), pages 117-129, April.
    19. Bernard Hoekman & Francis Ng & Marcelo Olarreaga, 2004. "Agricultural Tariffs or Subsidies: Which Are More Important for Developing Economies?," World Bank Economic Review, World Bank Group, vol. 18(2), pages 175-204.
    20. Parker, Glenn R & Parker, Suzanne L, 1998. "The Economic Organization of Legislatures and How It Affects Congressional Voting," Public Choice, Springer, vol. 95(1-2), pages 117-129, April.
    21. Vousden,Neil, 1990. "The Economics of Trade Protection," Cambridge Books, Cambridge University Press, number 9780521346696.
    22. Devashish Mitra & Dimitrios D. Thomakos & Mehmet A. Ulubaşoğlu, 2016. "“Protection For Sale” In A Developing Country: Democracy Vs. Dictatorship," World Scientific Book Chapters,in: The Political Economy of Trade Policy Theory, Evidence and Applications, chapter 9, pages 163-174 World Scientific Publishing Co. Pte. Ltd..
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. John Gilbert & Reza Oladi, 2012. "Net campaign contributions, agricultural interests, and votes on liberalizing trade with China," Public Choice, Springer, vol. 150(3), pages 745-769, March.
    2. Bellemare, Marc F. & Carnes, Nicholas, 2015. "Why do members of congress support agricultural protection?," Food Policy, Elsevier, vol. 50(C), pages 20-34.
    3. repec:bla:reviec:v:25:y:2017:i:1:p:21-43 is not listed on IDEAS
    4. Kym Anderson & Gordon Rausser & Johan Swinnen, 2013. "Political Economy of Public Policies: Insights from Distortions to Agricultural and Food Markets," Journal of Economic Literature, American Economic Association, vol. 51(2), pages 423-477, June.
    5. Dutt, Pushan & Mitra, Devashish, 2009. "Explaining Agricultural Distortion Patterns : The Roles of Ideology, Inequality, Lobbying and Public Finance," Agricultural Distortions Working Paper 50299, World Bank.
    6. Clas Eriksson, 2011. "Home bias in preferences and the political economics of agricultural protection," Review of Agricultural and Environmental Studies - Revue d'Etudes en Agriculture et Environnement, INRA Department of Economics, vol. 92(1), pages 5-23.
    7. Tyutin, Anton & Zaporozhets, Vera, 2017. "On Legislative Lobbying under Political Uncertainty," TSE Working Papers 17-807, Toulouse School of Economics (TSE).
    8. Zahrnt, Valentin, 2008. "Domestic constituents and the formulation of WTO negotiating positions: what the delegates say," World Trade Review, Cambridge University Press, vol. 7(02), pages 393-421, April.
    9. Lopez, Rigoberto A. & He, Xi & De Falcis, Eleonora, 2017. "What Drives China’s New Agricultural Subsidies?," World Development, Elsevier, vol. 93(C), pages 279-292.

    More about this item

    Keywords

    Economic Theory&Research; Free Trade; Consumption; Markets and Market Access; Technology Industry;

    JEL classification:

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

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