 Trade policy-making in a model of legislative bargainingLevent Celik, Bilgehan Karabay and John McLaren Journal of International Economics, 2013, vol. 91, issue 2, 179-190 Abstract: In democracies, trade policy is the result of interactions among many agents with different agendas. In accordance with this observation, we construct a dynamic model of legislative trade policy-making in the realm of distributive politics. An economy consists of different sectors, each of which is concentrated in one or more electoral districts. Each district is represented by a legislator in the Congress. Legislative process is modeled as a multilateral sequential bargaining game à la Baron and Ferejohn (1989). Some surprising results emerge: bargaining can be welfare-worsening for all participants; legislators may vote for bills that make their constituents worse off; identical industries will receive very different levels of tariff. The results pose a challenge to empirical work, since equilibrium trade policy is a function not only of economic fundamentals but also of political variables at the time of congressional negotiations — some of them random realizations of mixed bargaining strategies. Keywords: Trade policy; Multilateral legislative bargaining; Political economy; Distributive politics (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:inecon:v:91:y:2013:i:2:p:179-190 DOI: 10.1016/j.jinteco.2013.09.001 Access Statistics for this article Journal of International Economics is currently edited by Martin Uribe and Costas Arkolakis More articles in Journal of International Economics from Elsevier |
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