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Does electoral competition affect politicians’ trade policy preferences? Evidence from Japan

Abstract

This study examines the effect of electoral competition on politicians’ trade policy preferences using candidate observations from the House of Representatives in Japan’s 2012 general election. The study clarifies the effects of constituency size and the electoral strength of constituencies on candidates’ political stances. The empirical results provide evidence that politicians’ preferences for trade policy are sensitive to electoral pressure, but their reactions differ depending on the characteristics of each constituency. The results reveal that for a broad constituency with a large concentration of agricultural workers, election candidates are more likely to support protectionism than their counterparts running in a narrow constituency. For city district election candidates, electoral strength measured by the vote margin significantly affects their trade policy preferences. Candidates in close elections are more likely to be protectionist than candidates elected by a substantial majority, suggesting that electoral pressures deter politicians from supporting trade liberalization.

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Notes

  1. 1.

    For example, Magee (1980) and Irwin (1994) examine the correlation between votes for trade bills by congressional representatives and industry characteristics of their constituencies but do not consider skill endowment factors. Similarly, Kaempfer and Marks (1993), Baldwin and Magee (2000) and Beaulieu (2002) examine the determinants of votes for trade liberalization bills by members of the US Congress introducing both skill endowment and industry variables in their representative districts. Mostly, these studies report that both skill endowment and industry characteristics of legislators’ constituencies are correlated with votes on trade policy bills.

  2. 2.

    Grossman and Helpman (1994) theoretically explain that the introduction of a trade restriction policy is determined by the contributions of lobbying groups. Baldwin and Magee (2000) and Devault (2010) report that campaign contributions affected legislators’ votes on free trade agreements in the US House of Representatives.

  3. 3.

    In the US Congress, one-third of senators are elected every 2 years together with the entire membership of the House of Representatives.

  4. 4.

    UTAS is conducted by Masaki Taniguchi of the Graduate Schools for Law and Politics, University of Tokyo and the Asahi Shimbun.

  5. 5.

    The survey was conducted with 1504 candidates from 16 November to 16 December 2012 just before the election date, and there were 1404 valid respondents. Of these, 1294 candidates ran in single-seat constituencies. In the election, 480 seats were filled of which 300 were for single-seat districts, and 180 were elected by the proportional representation system. A candidate who belongs to a political party is allowed to run for the election in both a single-seat constituency and a proportional representation district. The seat allocation for the proportional representation system by fixed list uses the D’Hondt formula, and in cases where the same order in the list is allowed in the system, the candidate with a high loss margin in the single-seat constituency is elected.

  6. 6.

    Significant cases in which dissension resulted in the dissolution of parliament are the postal bills in 2005, the budget bill in 2011 and the bill to raise the consumption tax in 2012.

  7. 7.

    The survey was conducted with 10,816 randomly selected individuals located throughout Japan in 2011, who were asked the following question. “Do you agree with the following statement? We should further liberalize imports to make wider varieties of goods available at lower prices.” The responses were as follows: “strongly agree” (8.9 %), “somewhat agree” (42.5 %), “somewhat disagree” (26.9 %), “strongly disagree” (4.6 %), and “cannot choose or unsure” (17.1 %) (Tomiura et al. 2013). Additionally, this result differs from the US where most people oppose trade liberalization (Scheve and Slaughter 2001; Mayda and Rodrik 2005).

  8. 8.

    The World Tariff Profiles 2014 report that Japan’s average most favored nation applied tariff rate on agricultural products is 19 %, which is significantly higher than that of the EU (13.2 %) or the US (5.3 %). In particular, the tariff rate on some commodities is extremely high. For example, the tariff on rice is equivalent to 778 %, and the tariff on butter is 360 %. However, the average tariff rate on non-agricultural products in Japan is 2.6 %, which is lower than that of the EU (4.2 %) and the US (3.1 %).

  9. 9.

    Sympathy for farmers may be one of the reasons, as suggested by Naoi and Kume (2011), who examine the determinants of support for agricultural protectionism based on an experimental survery. They show that producer-priming respondents rather than consumer-priming respondents increase opposition to food import among 1200 respondents in Japan.

  10. 10.

    The authors use the Americans for Democratic Action score as a measurement of representatives’ policy positions.

  11. 11.

    There are no official statistics at the constituency level. Therefore, this study constructs data by aggregating data from the 2010 national census disaggregated into the “cyocyo” level, which is the smallest unit of address in a municipality, similar to a “street” level.

  12. 12.

    Politicians can receive donations from corporations because the law allows free movement of money between a political party and politicians. To some extent, party dummy variables are expected to control for the possible effects of political contributions through this legal loophole.

  13. 13.

    According to trade volume statistics in 2013, the US was Japan’s largest export destination and the second largest origin of imports. Japan’s share of trade with the US is 26.9 % of its total trade volume.

  14. 14.

    Although multicollinearity may be of concern, a correlation matrix among the explanatory variables does not show significantly high correlation coefficients.

  15. 15.

    See Scheve and Slaughter (2001), Mayda and Rodrik (2005), Blonigen (2011) and Ito et al. (2015).

  16. 16.

    The estimation results from the bivariate probit model are similar to those from the probit model shown in Tables 3 and 6. These results are available upon request.

  17. 17.

    For causality, using the number of votes of the last election may be appropriate, but that would sacrifice the sample of newcomers who comprise 61 % of the total sample.

  18. 18.

    A hereditary candidate is defined as one who has a relative within the third degree of relation who was a Diet member and an individual who aims to succeed that member in the entire electoral district or some part of the district. Alternatively, a hereditary candidate is an individual with a parent who was a Diet member, even if the candidate does not succeed the parent in the district. According to the definition, 11 % (140 people) of the total number of candidates (1294 people) were hereditary candidates who ran from single-seat constituencies, and 80 % (112 people) of those were elected.

  19. 19.

    For the full specification without interaction terms, the Smith-Blundell test statistic is 0.481, and the P-value is 0.786. Even in the case where margin or broad is treated as an endogenous variable, the exogeneity is not rejected. The estimation results from the probit model with endogenous variables are available upon request.

  20. 20.

    It is not compulsory to vote in public elections in Japan. Japan’s participation ratios are significantly lower than are those of the US (67.95 %) and UK (65.77 %) and are closer to those of France (55.4 %).

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Acknowledgments

The author would like to thank the anonymous referees for their valuable comments and suggestions to improve the quality of this paper. The author is grateful to Shinju Fujihira, Naofumi Fujimura, Robert Paarlberg, Susan Pharr, Daniel Smith and the seminar participants at the Weatherhead Center at Harvard University for their valuable comments. This study was conducted while the author was a Visiting Scholar in the Weatherhead Center at Harvard University. The author acknowledges the Weatherhead Center for their support.

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Correspondence to Banri Ito.

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This work was supported by JSPS KAKENHI grant no. 25380284 and a research grant from Senshu University.

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Ito, B. Does electoral competition affect politicians’ trade policy preferences? Evidence from Japan. Public Choice 165, 239–261 (2015). https://doi.org/10.1007/s11127-015-0306-3

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Keywords

  • Trade policy
  • Protectionism
  • Election
  • Constituency size

JEL Classification

  • D72
  • F13