Working Papers, Department of Economics, Lund University
No 2005:31:
Special Interest Politics and Trade Policy – An Empirical Challenge
Carl-Johan Belfrage ()
Abstract: The model of protectionist support for individual
industries as an endogenous outcome of special interest politics pioneered
by Grossman and Helpman (1994) is generalized and then empirically examined
using data for a number of OECD countries and regions. Cross-sectional
regressions are performed on the full sample,as well as on individual
countries. The model generally holds up quite well to this empirical
challenge. The estimates indicate that equilibrium ratios of special
interest to general interest marginal utilities (with respect to protection
levels) vary positively with protection levels as the theory has led us to
expect. Terms of trade concerns seem important to the larger countries in
our sample as implied by the present generalization of the GH model (as
well as by the optimum tariff literature), but the influence of downstream
interests does not come across in the estimates. The results seem robust
also to inclusion of variables reflecting exogenous political concerns
(indicated as relevant in other studies), although those bring a
substantial addition to predictive power which strengthens the impression
that (what is endogenously derived in) the GH model only captures a limited
share of the considerations underlying trade policy decisions.
Keywords: Trade policy; Lobbying; Special interest groups; (follow links to similar papers)
JEL-Codes: F13; (follow links to similar papers)
46 pages, June 3, 2004
Before downloading any of the electronic versions below
you should read our statement on
copyright.
Download GhostScript
for viewing Postscript files and the
Acrobat Reader for viewing and printing pdf files.
Full text versions of the paper:
WP05_31.pdf 
Download Statistics
Questions (including download problems) about the papers in this series should be directed to David Edgerton ()
Report other problems with accessing this service to Sune Karlsson ()
or Helena Lundin ().
Programing by
Design by Joachim Ekebom
