Endogenous trade policy through majority voting: an empirical investigation

Pushan Dutt and Devashish Mitra ()

Chapter 4 in The Political Economy of Trade Policy:Theory, Evidence and Applications, 2016, pp 67-93 from World Scientific Publishing Co. Pte. Ltd.

Abstract: The median-voter approach to trade policy determination (within a Heckscher-Ohlin framework) as in Mayer [Am. Econ. Rev. 74(5) (1984) 970] predicts that an increase in inequality, holding constant the economy's overall relative endowments, raises trade barriers in capital-abundant economies and lowers them in capital-scarce economies. We find support for this prediction using cross-country data on inequality, capital-abundance and diverse measures of protection. We perform certain robustness checks that include controlling for the effects of political rights and schooling as well as using alternative datasets on factor endowments.

Keywords: Political Economy; Protection; Trade Policy; Tariffs; Subsidies; Reciprocal Trade Liberalization; Unilateral Trade Liberalization; Unilateralism; Reciprocity; Lobbying; Median Voter Models (search for similar items in EconPapers)
Date: 2016
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Journal Article: Endogenous trade policy through majority voting: an empirical investigation (2002)
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