Political Ideology and Endogenous Trade Policy: An Empirical Investigation

Pushan Dutt () and Devashish Mitra ()

The Review of Economics and Statistics, 2005, vol. 87, issue 1, 59-72

Abstract: In this paper, we investigate empirically how government ideology affects trade policy. The prediction of a partisan, ideology-based model (within a two-sector, two-factor Heckscher-Ohlin framework) is that left-wing governments will adopt more protectionist trade policies in capital-rich countries, but adopt more pro-trade policies in labor-rich countries, than right-wing ones. The data strongly support this prediction in a very robust fashion. There is some evidence that this relationship may hold better in democracies than in dictatorships, though the magnitude of the partisan effect seems stronger in dictatorships. © 2005 President and Fellows of Harvard College and the Massachusetts Institute of Technology.

Date: 2005
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