Endogenous Distribution and the Political Economy of Trade Policy

Abstract

There are two discernible approaches to the political economy of trade policy. One emphasizes representative democracy. There are pressure groups for or against some form of trade protection through lobbying efforts (e.g. [8],[9],[7],[10] among many others). While Hillman and Ursrung, for example, emphasize political competition where candidates seek to win elections and are drawn by the compulsion of the desire to win political office, Grossman and Helpman portray a politician as selling protection. The other approach characterizes trade policy as emerging from direct democracy or voting. Theoretical works include [11],[12], and [13]. An empirical analysis of trade policy legislation in a direct democracy is undertaken by [18].