Commercial Policy with Altruistic Voters

Abstract

In public discussions of policy, evidence that import-competing sectors earn low or falling incomes is often used to argue for protection. This paper rationalizes the apparent effectiveness of this argument in both direct and indirect democracies. In direct democracies, a small degree of voter altruism leads to protection in the specific factors model when the import-competing sector earns little. Similarly, voter altruism creates an incentive in representative democracies for self-interested parties to present evidence to legislators on the income of import-competing factors. This leads to a theory in which campaign contributions buy access to legislators rather than buy votes.