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Endogenous trade policy through majority voting: an empirical investigation

In: The Political Economy of Trade Policy Theory, Evidence and Applications

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  • Pushan Dutt
  • Devashish Mitra

Abstract

The median-voter approach to trade policy determination (within a Heckscher-Ohlin framework) as in Mayer [Am. Econ. Rev. 74(5) (1984) 970] predicts that an increase in inequality, holding constant the economy's overall relative endowments, raises trade barriers in capital-abundant economies and lowers them in capital-scarce economies. We find support for this prediction using cross-country data on inequality, capital-abundance and diverse measures of protection. We perform certain robustness checks that include controlling for the effects of political rights and schooling as well as using alternative datasets on factor endowments.

Suggested Citation

  • Pushan Dutt & Devashish Mitra, 2016. "Endogenous trade policy through majority voting: an empirical investigation," World Scientific Book Chapters, in: The Political Economy of Trade Policy Theory, Evidence and Applications, chapter 4, pages 67-93, World Scientific Publishing Co. Pte. Ltd..
    • Handle: RePEc:wsi:wschap:9789814569156_0004
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    More about this item

    Keywords

    Political Economy; Protection; Trade Policy; Tariffs; Subsidies; Reciprocal Trade Liberalization; Unilateral Trade Liberalization; Unilateralism; Reciprocity; Lobbying; Median Voter Models;
    All these keywords.

    JEL classification:

    • F0 - International Economics - - General
    • F6 - International Economics - - Economic Impacts of Globalization

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