Political Ideology and Endogenous Trade Policy: An Empirical Investigation

40 Pages Posted: 27 Sep 2002 Last revised: 1 Oct 2022

See all articles by Pushan Dutt

Pushan Dutt

INSEAD - Economics and Political Sciences

Devashish Mitra

Syracuse University - Department of Economics; National Bureau of Economic Research (NBER); IZA Institute of Labor Economics

Date Written: September 2002

Abstract

In this paper, we empirically investigate how government ideology affects trade policy. The prediction of a partisan, ideology-based model (within a two-sector, two-factor Heckscher-Ohlin framework) is that left-wing governments will adopt more protectionist trade policies in capital rich countries, but adopt more pro-trade policies in labor rich economies than right-wing ones. The data strongly support this prediction in a very robust fashion. There is some evidence, that this relationship may hold better in democracies than in dictatorships though the magnitude of the partisan effect seems stronger in dictatorships.

Suggested Citation

Dutt, Pushan and Mitra, Devashish, Political Ideology and Endogenous Trade Policy: An Empirical Investigation (September 2002). NBER Working Paper No. w9239, Available at SSRN: https://ssrn.com/abstract=334331

Pushan Dutt

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