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Lobbying and the Structure of Protection

Author

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  • Cadot, Olivier
  • de Melo, Jaime
  • Olarreaga, Marcelo

Abstract

This paper extends the influence-driven model of trade policy determination to include general equilibrium effects on the supply side resulting from labour-market interaction and intermediate goods. The model’s predictions for the structure of protection are related to underlying taste and technology parameters, and we derive analytically several propositions that are consistent with the stylized results of the empirical literature. Finally, numerical simulations are carried out for archetypal ‘rich’ and ‘poor’ economies. It turns out that the endogenously-determined structure of protection is broadly consistent with the observed pattern of protection in rich and poor economies, suggesting the usefulness of the approach.

Suggested Citation

  • Cadot, Olivier & de Melo, Jaime & Olarreaga, Marcelo, 1997. "Lobbying and the Structure of Protection," CEPR Discussion Papers 1574, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:1574
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    Citations

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    Cited by:

    1. Conconi, P., 2000. "Green and Producer Lobbies: Enemies or Allies?," The Warwick Economics Research Paper Series (TWERPS) 570, University of Warwick, Department of Economics.
    2. Grether, Jean-Marie & de Melo, Jaime & Olarreaga, Marcelo, 2001. "Who determines Mexican trade policy?," Journal of Development Economics, Elsevier, vol. 64(2), pages 343-370, April.
    3. Chang, Kuo-I & Hayakawa, Kazunobu, 2012. "Selection and utilization of the early harvest list : evidence from the Free Trade Agreement between China and Taiwan," IDE Discussion Papers 365, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    4. Bertrand LAPORTE, 2002. "« Dé-privatisation » de la politique commerciale ? La mise en place du tarif extérieur commun de l’UEMOA," Working Papers 200203, CERDI.
    5. de Melo, Jaime & Cadot, Olivier & Olarreaga, Marcelo, 2000. "The Protectionist Bias of Duty Drawbacks and the New Regionalism," CEPR Discussion Papers 2559, C.E.P.R. Discussion Papers.
    6. Wang, Jue-Shyan & Koo, Hui-wen & Chen, Tain-Jy, 2006. "Resource rivalry and endogenous lobby," Japan and the World Economy, Elsevier, vol. 18(4), pages 488-511, December.
    7. Houda Haffoudhi, 2005. "The logic of two-level games with endogenous lobbying: the case of international environmental agreements," Post-Print halshs-00195605, HAL.
    8. Houda Haffoudhi, 2005. "Political-support lobbies responses to international environmental agreements," Cahiers de la Maison des Sciences Economiques j05053, Université Panthéon-Sorbonne (Paris 1).
    9. Ms. Giorgia Albertin, 2008. "Regionalism or Multilateralism? A Political Economy Choice," IMF Working Papers 2008/065, International Monetary Fund.
    10. Anderson, Kym, 1998. "Are resource-abundant economies disadvantaged?," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 42(1), pages 1-23.
    11. Cadot, Olivier & de Melo, Jaime & Olarreaga, Marcelo, 2001. "Can duty-drawbacks have a protectionist bias? Evidence from MERCOSUR," Policy Research Working Paper Series 2523, The World Bank.
    12. Matthew Grant, 2020. "Why Special Economic Zones? Using Trade Policy to Discriminate across Importers," American Economic Review, American Economic Association, vol. 110(5), pages 1540-1571, May.
    13. Houda Haffoudhi, 2005. "Political-support lobbies responses to international environmental agreements," Post-Print halshs-00195593, HAL.
    14. Houda Haffoudhi, 2005. "The logic of two-level games with endogenous lobbying: the case of international environmental agreements," Cahiers de la Maison des Sciences Economiques j05054, Université Panthéon-Sorbonne (Paris 1).
    15. Belfrage, Carl-Johan, 2004. "Special Interest Politics and Trade Policy – An Empirical Challenge," Working Papers 2005:31, Lund University, Department of Economics.
    16. Madani, Dorsati & Olarreaga, Marcelo, 2002. "Politically optimal tariffs : an application to Egypt," Policy Research Working Paper Series 2882, The World Bank.

    More about this item

    Keywords

    Endogenous Tariff; Political Economy;

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

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