Politics and Trade Policy

Elhanan Helpman

No 1269, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: The paper first describes a number of political economy approaches that have been developed to explain trade policies. All approaches are presented in a unified framework that helps to identify the key differences between them. These comparisons revolve around tariff formulas that are predicted by political equilibria. A typical formula explains cross-sectoral variations in rates of protection as well as differences in average rates of protection across countries. Second, I review a set of results that emerge from a new approach to the interaction of international economic relations with domestic politics. Importantly, there are two-way interactions in such systems. They link the formation of trade policies in the international arena with the activities of domestic special interest groups. The use of a framework of this sort is essential for a proper analysis of a host of important problems, such as negotiations about tariff levels or the formation of free trade areas. Recent studies have developed suitable tools for this purpose.

Keywords: Political Economy; Trade Policy (search for similar items in EconPapers)
JEL-codes: F13 F15 (search for similar items in EconPapers)
Date: 1995-11
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Citations: View citations in EconPapers (48)

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Related works:
Working Paper: Politics and Trade Policy (1995)
Working Paper: Politics and Trade Policy (1995)
Working Paper: Politics and Trade Policy (1995)
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