Protection for Sale

Gene M. Grossman and Elhanan Helpman
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Gene M. Grossman: Princeton University
Elhanan Helpman: Tel Aviv University

A chapter in 40 Years of Research on Rent Seeking 2, 2008, pp 131-148 from Springer

Abstract: Abstract We develop a model in which special- interest groups make political contributions in order to influence an incumbent government’s choice of trade policy. The interest groups bid for protection with their campaign support. Politicians maximize their own welfare, which depends on total contributions collected and on the welfare of voters. We study the structure of protection that emerges in the political equilibrium and the contributions by different lobbies that support the policy outcome. We also discuss why the lobbies may in some cases prefer to have the government use trade policy to transfer income, rather than more efficient means. (JEL F13, D72)

Date: 2008
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-540-79247-5_7

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DOI: 10.1007/978-3-540-79247-5_7

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