Why Legislators are Protectionists: The Role of Majoritarian Voting in Setting Tariffs
28 Pages Posted: 14 Jul 2004
Date Written: July 14, 2004
Abstract
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
JEL Classification: F10, F13, D72
Suggested Citation: Suggested Citation
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