POLITICAL IDEOLOGY AND ENDOGENOUS TRADE POLICY: AN EMPIRICAL INVESTIGATION

Pushan Dutt and Devashish Mitra ()

Chapter 5 in The Political Economy of Trade Policy:Theory, Evidence and Applications, 2016, pp 95-108 from World Scientific Publishing Co. Pte. Ltd.

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.

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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Related works:
Journal Article: Political Ideology and Endogenous Trade Policy: An Empirical Investigation (2005)
Working Paper: Political Ideology and Endogenous Trade Policy: An Empirical Investigation (2002)
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