Why Legislators are Protectionists: The Role of Majoritarian Voting in Setting Tariffs
Gerald Willmann ()
No 2003-10, Economics Working Papers from Christian-Albrechts-University of Kiel, Department of Economics
Based on the observation that industries are often geographically concentrated, this paper proposes a new political economy model of trade protection. We associate the sectors of a specific factors model with electoral districts populated by continua of heterogeneous voters who differ in their relative factor endowments. We show how strategic delegation leads each district to elect a representative who is more protectionist than the median voter. The legislature formed by these representatives then sets tariffs that are strictly positive. Introducing additional policy instruments reveals a trade-off between efficiency and regional targetability.
Keywords: trade policy; political economy; representative democracy (search for similar items in EconPapers)
JEL-codes: D72 F10 F13 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:cauewp:1049
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