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Political support for trade policy in the European Union

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  • Francois, Joseph

Abstract

We adopt the Stigler–Peltzman model of policy-making as developed by Hillman for application to the politics of international trade, in which the government is represented by a political support function trading-off the industry rents stemming from protection against the losses accruing to the general population. As a starting point, we examine the economic impact of actual government action as revealed by the structure of protection, backing out the weights implied by the marginal welfare effects of the set of EU import tariffs across sectors. We build on Tyers' application of methods to international trade employing a numerical general equilibrium model of the EU. This captures direct marginal effects of sector-level protection on protected industries, indirect effects on upstream and downstream industries, and the effect on overall welfare. We then deconstruct the revealed weighting pattern along the lines of industry nationality and related industry characteristics.

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  • Francois, Joseph, 2014. "Political support for trade policy in the European Union," Papers 889, World Trade Institute.
    • Handle: RePEc:wti:papers:889
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    Cited by:

    1. Wilfred J. Ethier & Arye L. Hillman, 2017. "The Politics of International Trade," CESifo Working Paper Series 6456, CESifo.
    2. Tushar Bharati & Mohammad Farhad & Michael Jetter, 2023. "On the relationship between trade openness and government size," The World Economy, Wiley Blackwell, vol. 46(7), pages 2102-2133, July.
    3. Timini, Jacopo, 2020. "Staying dry on Spanish wine: The rejection of the 1905 Spanish-Italian trade agreement," European Journal of Political Economy, Elsevier, vol. 63(C).
    4. Francois, Joseph & Nelson, Douglas & Rojas-Romagosa, Hugo, 2019. "Trade Wars and Trade Disputes: The Role of Equity and Political Support," Conference papers 333046, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    5. Saha, Amrita, 2019. "Trade policy & lobbying effectiveness: Theory and evidence for India," European Journal of Political Economy, Elsevier, vol. 56(C), pages 165-192.

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    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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