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Protection for sale with imperfect rent capturing

Giovanni Facchini, Johannes Van Biesebroeck and Gerald Willmann

Canadian Journal of Economics/Revue canadienne d'économique, 2006, vol. 39, issue 3, 845-873

Abstract: Abstract Grossman and Helpman (1994) explain tariffs as the outcome of a lobbying process. In most empirical implementations of this framework protection is instead measured using non‐tariff barriers. Since tariffs allow the government to fully capture the rents from protection, while non‐tariff barriers do not, the existing parameter estimates of the protection for sale model are likely to be biased. To address this problem, we augment the framework by considering instruments that allow partial capturing. Our specification is supported by the data, where we find that only 72–75% of the rent from protection is appropriated by the government. Grossman et Helpman (1994) expliquent les tarifs douaniers comme la résultante d'un jeu de lobbying. La plupart des usages de ce cadre d'analyse ont porté sur des barrières non‐tarifaires pour mesurer le degré de protection. Les tarifs douaniers permettent au gouvernement de capturer pleinement les rentes, ce n'est pas le cas pour les barrières non tarifaires. En conséquence, cela peut engendrer des estimations fautives des paramètres. Pour s'attaquer à ce problème, les auteurs enrichissent le modèle original en considérant explicitement des instruments de politique commerciale qui permettent de capturer seulement une partie des rentes. A l'aide de cette spécification, l'analyse des données révèle qu'en moyenne une portion de 70–75% de la rente est effectivement capturée.

Date: 2006
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Citations: View citations in EconPapers (21)

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https://doi.org/10.1111/j.1540-5982.2006.00373.x

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Journal Article: Protection for sale with imperfect rent capturing (2006)
Working Paper: Protection for Sale with Imperfect Rent Capturing (2005) Downloads
Working Paper: Protection for Sale with Imperfect Rent Capturing (2005) Downloads
Working Paper: Protection for Sale with Imperfect Rent Capturing (2003) Downloads
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