Explaining the Role of Interest Groups in United States Trade Policy

Abstract

This paper provides an alternative analytical view of the mechanism by which interest groups influence trade policy. In contrast to other economic models in which trade policy is essentially "bought" by industrial interests, this model views interest groups and legislators as possibly sharing the same objectives, which they then work together to pursue. The legislators have a limited budget of their own and their staff members' time to work on many issues, and the interest groups influence the process by helping with the work. By selecting legislators who are in closest agreement with their own objectives and then by assisting them in a way that, in effect, subsidizes their efforts, interest groups achieve a role in policy making that is potentially more important than if they merely used financial transfers. In the context of international trade policy, we view this model as applying not only to industries seeking protection, but also to many other interest groups who view restrictions of imports or other trade intervention as useful for their purposes. The latter need not have abundant financial resources in order to be effective, since their assistance can consist primarily of their members and volunteers' time, as well as the expertise that they have accumulated from experience in dealing with an issue.

JEL Classification: F13, H00