LOBBYING COMPETITION OVER TRADE POLICY

Kishore Gawande, Pravin Krishna and Marcelo Olarreaga

International Economic Review, 2012, vol. 53, issue 1, 115-132

Abstract: Competition between opposing lobbies is an important factor in the endogenous determination of trade policy. This article investigates the consequences of lobbying competition between upstream and downstream producers. The theoretical structure underlying the empirical analysis is the well‐known Grossman–Helpman model of trade policy determination, modified to account for the cross‐sectoral use of inputs (itself a quantitatively significant phenomenon, with around 50% of manufacturing output being used by other sectors rather than in final consumption). Our empirical results validate the theoretical predictions. Importantly, accounting for lobbying competition also alters substantially estimates of the “welfare‐mindedness” of governments in setting trade policy.

Date: 2012
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https://doi.org/10.1111/j.1468-2354.2011.00673.x

Related works:
Working Paper: Lobbying competition over trade policy (2009)
Working Paper: Lobbying Competition Over Trade Policy (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:wly:iecrev:v:53:y:2012:i:1:p:115-132

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