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Cooperative Lobbying and Endogenous Trade Policy

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  • Aidt, Toke Skovsgaard

Abstract

This paper considers trade policies in a small open economy in which two influential interest groups lobby the government. Since competitive lobbying leads to excess rent-seeking expenditures, the lobbies have an incentive to cooperate. The outcome of cooperative lobbying is characterized in terms of lobbying and bargaining power of the two groups. Two important results are derived. First, if the power of competing interest groups is balanced, then cooperation leads to free trade. Second, if it is unbalanced, cooperation may, on the contrary, increase protection. Copyright 1997 by Kluwer Academic Publishers

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  • Aidt, Toke Skovsgaard, 1997. "Cooperative Lobbying and Endogenous Trade Policy," Public Choice, Springer, vol. 93(3-4), pages 455-475, December.
    • Handle: RePEc:kap:pubcho:v:93:y:1997:i:3-4:p:455-75
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    Cited by:

    1. Cheikbossian, Guillaume, 2008. "Rent-seeking, spillovers and the benefits of decentralization," Journal of Urban Economics, Elsevier, vol. 63(1), pages 217-228, January.
    2. Toke S. Aidt & Martin Gassebner, 2010. "Do Autocratic States Trade Less?," The World Bank Economic Review, World Bank, vol. 24(1), pages 38-76, January.
    3. Polk, Andreas & Schmutzler, Armin, 2005. "Lobbying against environmental regulation vs. lobbying for loopholes," European Journal of Political Economy, Elsevier, vol. 21(4), pages 915-931, December.
    4. Cheikbossian, Guillaume, 2008. "Heterogeneous groups and rent-seeking for public goods," European Journal of Political Economy, Elsevier, vol. 24(1), pages 133-150, March.
    5. repec:hal:journl:dumas-00906165 is not listed on IDEAS
    6. Sebastian Krapohl & Václav Ocelík & Dawid M. Walentek, 2021. "The instability of globalization: applying evolutionary game theory to global trade cooperation," Public Choice, Springer, vol. 188(1), pages 31-51, July.
    7. Ho, Shirley J., 2007. "Impacts of interest groups: Endogenous interaction and lobbying limits," Economic Modelling, Elsevier, vol. 24(3), pages 506-522, May.
    8. Thomas Eichner & Rüdiger Pethig, 2015. "Lobbying for and Against Subsidizing Green Energy," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 62(4), pages 925-947, December.
    9. Steven G. Medema, 2020. "The Coase Theorem at Sixty," Journal of Economic Literature, American Economic Association, vol. 58(4), pages 1045-1128, December.
    10. Jackson, Lee Ann, 2000. "An Economic Model Of Agricultural Labeling Policy Harmonization In International Trading Systems," Transitions in Agbiotech: Economics of Strategy and Policy, June 24-25, 1999, Washington, D.C. 26012, Regional Research Project NE-165 Private Strategies, Public Policies, and Food System Performance.

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