Campaign Contributions for Free Trade: Salient and Non-salient Agendas

Hideo Konishi and Chen-Yu Pan

No 926, Boston College Working Papers in Economics from Boston College Department of Economics

Abstract: Although protectionism became a salient issue in the 2016 presidential election campaign, both Republican and Democratic adminis- trations have been silently promoting free trade for decades. We set up a two-party electoral competition model in a two-dimensional policy space with campaign contributions by a group (exporting/multinational firms) that is interested in promoting free trade, for which voters do not have positive sentiment. Assuming that voters are impressionable to campaign spending for/against candidates, we analyze the optimal contract between the interest group and the candidates on policy is- sues and campaign contributions. If voters' negative sentiment to free trade is not too strong, the interest group tends to contribute to both candidates to make free trade a nonsalient issue, and the candidates compete over the other (ideological) dimension only. If votersíneg- ative sentiment to free trade is strong, the interest group tends to contribute to a more malleable candidate only.

Keywords: electoral competition; campaign contribution; trade negotiation; GATT; preferential trade agreement; populism (search for similar items in EconPapers)
JEL-codes: C72 D72 F02 F13 (search for similar items in EconPapers)
Date: 2017-05-05
New Economics Papers: this item is included in nep-cdm, nep-int and nep-pol
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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