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Positive Feedback: The Impact of Trade Liberalization on Industry Demands for Protection

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  • Hathaway, Oona A.

Abstract

Contrary to widely accepted theories of interest-group demand for protection, industries that experience high and rising import competition after a reduction in trade barriers often become less rather than more protectionist in the long term. To unravel this paradox, I propose and test a theory that explains variation in domestic producer groups' demand for protection over time. This model of industry behavior suggests that trade liberalization has a “positive feedback” effect on the policy preferences and political strategies of domestic industries, compelling them to adjust to more competitive market conditions and thereby reducing their future demand for protection.

Suggested Citation

  • Hathaway, Oona A., 1998. "Positive Feedback: The Impact of Trade Liberalization on Industry Demands for Protection," International Organization, Cambridge University Press, vol. 52(3), pages 575-612, July.
    • Handle: RePEc:cup:intorg:v:52:y:1998:i:03:p:575-612_44
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    Cited by:

    1. Pierre-Olivier Peytral, 2004. "Economie politique de la politique d'ouverture commerciale mixte : interactions entre les groupes sociaux et l'Etat," Post-Print halshs-00104875, HAL.
    2. Baccini, Leonardo & Urpelainen, Johannes, 2012. "Strategic side payments: preferential trading agreements, economic reform, and foreign aid," LSE Research Online Documents on Economics 45057, London School of Economics and Political Science, LSE Library.
    3. Baldwin, Richard, 2008. "Big-Think Regionalism: a Critical Survey," CEPR Discussion Papers 6874, C.E.P.R. Discussion Papers.
    4. Eden, Lorraine & Molot, Maureen Appel, 2002. "Insiders, outsiders and host country bargains," Journal of International Management, Elsevier, vol. 8(4), pages 359-388.
    5. Regina M. Abrami & Yu Zheng, 2010. "The New Face of Chinese Industrial Policy: Making Sense of Anti-Dumping Cases in the Petrochemical and Steel Industries," Harvard Business School Working Papers 11-042, Harvard Business School.
    6. Iain Osgood, 2016. "Differentiated Products, Divided Industries: Firm Preferences over Trade Liberalization," Economics and Politics, Wiley Blackwell, vol. 28(2), pages 161-180, July.
    7. Susanne K. Schmidt, 2000. "Only an Agenda Setter?," European Union Politics, , vol. 1(1), pages 37-61, February.
    8. Leonardo Baccini & Iain Osgood & Stephen Weymouth, 2019. "The service economy: U.S. trade coalitions in an era of deindustrialization," The Review of International Organizations, Springer, vol. 14(2), pages 261-296, June.
    9. David Lake, 2009. "Open economy politics: A critical review," The Review of International Organizations, Springer, vol. 4(3), pages 219-244, September.
    10. Aydin B. Yildirim & J. Tyson Chatagnier & Arlo Poletti & Dirk De Bièvre, 2018. "The internationalization of production and the politics of compliance in WTO disputes," The Review of International Organizations, Springer, vol. 13(1), pages 49-75, March.
    11. Littoz-Monnet, Annabelle, 2010. "Dynamic Multi-Level Governance – Bringing the Study of Multi-level Interactions into the Theorising of European Integration," European Integration online Papers (EIoP), European Community Studies Association Austria (ECSA-A), vol. 14, April.

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