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Protection for Sale and Trade Liberalization: an Empirical Investigation

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  • Phillip McCalman

Abstract

The paper uses Grossman and Helpman's “protection for sale” model (1994) to analyze the process of trade liberalization that has occurred in Australia. First, this paper verifies that the predictions of the “protection for sale” model are consistent with the data. Then, it analyzes the endogenous dimension of the Australian experience of trade liberalization. The estimated structural parameters imply that the process of trade liberalization has been driven by increases in both the fraction of the voting population represented by lobbies, and the government's relative valuation of welfare (the former playing the more prominent role).

Suggested Citation

  • Phillip McCalman, 2004. "Protection for Sale and Trade Liberalization: an Empirical Investigation," Review of International Economics, Wiley Blackwell, vol. 12(1), pages 81-94, February.
    • Handle: RePEc:bla:reviec:v:12:y:2004:i:1:p:81-94
    DOI: 10.1111/j.1467-9396.2004.00432.x
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    References listed on IDEAS

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    1. W. Max Corden, 1996. "Protection and Liberalisation in Australia and Abroad," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 29(2), pages 141-154, April.
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