IDEAS home Printed from https://ideas.repec.org/p/wpa/wuwpit/9609001.html
   My bibliography  Save this paper

Endogenous Behaviour of the Tariff Rate in a Political Economy

Author

Listed:
  • Hom M Pant

    (University of Tasmania)

Abstract

How would the tariff rate in a political economy respond to changes in exogenous environment? To answer this question a bargain-theoretic approach is adopted and a tariff-endogenous general equilibrium model of a small open political economy is derived. A comparative static analysis of the model shows that the bargained tariff rate changes to compensate, at least in part, for the relative loss of the loser arising from changes in the exogenous environment - be it the domestic factor endowment or the international terms of trade

Suggested Citation

  • Hom M Pant, 1996. "Endogenous Behaviour of the Tariff Rate in a Political Economy," International Trade 9609001, University Library of Munich, Germany, revised 01 Oct 1996.
    • Handle: RePEc:wpa:wuwpit:9609001
    Note: Type of Document - Word 7.0; prepared on IBM PC ; to print on HP LaserJet4; pages: 29 ; figures: included. Comments welcome!
    as

    Download full text from publisher

    File URL: https://econwpa.ub.uni-muenchen.de/econ-wp/it/papers/9609/9609001.html
    Download Restriction: no
    File URL: https://econwpa.ub.uni-muenchen.de/econ-wp/it/papers/9609/9609001.pdf
    Download Restriction: no
    File URL: https://econwpa.ub.uni-muenchen.de/econ-wp/it/papers/9609/9609001.ps.gz
    Download Restriction: no
    File URL: https://econwpa.ub.uni-muenchen.de/econ-wp/it/papers/9609/9609001.doc.gz
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Robert C. Feenstra & Jagdish N. Bhagwati, 1982. "Tariff Seeking and the Efficient Tariff," NBER Chapters, in: Import Competition and Response, pages 245-262, National Bureau of Economic Research, Inc.
    2. Svejnar, Jan, 1986. "Bargaining Power, Fear of Disagreement, and Wage Settlements: Theory and Evidence from U.S. Industry," Econometrica, Econometric Society, vol. 54(5), pages 1055-1078, September.
    3. Nash, John, 1953. "Two-Person Cooperative Games," Econometrica, Econometric Society, vol. 21(1), pages 128-140, April.
    4. Mussa, Michael, 1974. "Tariffs and the Distribution of Income: The Importance of Factor Specificity, Substitutability, and Intensity in the Short and Long Run," Journal of Political Economy, University of Chicago Press, vol. 82(6), pages 1191-1203, Nov.-Dec..
    5. Ken Binmore & Ariel Rubinstein & Asher Wolinsky, 1986. "The Nash Bargaining Solution in Economic Modelling," RAND Journal of Economics, The RAND Corporation, vol. 17(2), pages 176-188, Summer.
    6. Gardner, Bruce, 1981. "Efficient Redistribution in Agricultural Commodity Markets," Working Papers 20, The University of Chicago Booth School of Business, George J. Stigler Center for the Study of the Economy and the State.
    7. Wellisz, Stanislaw & Wilson, John D., 1986. "Lobbying and tariff formation: A deadweight loss consideration," Journal of International Economics, Elsevier, vol. 20(3-4), pages 367-375, May.
    8. Hillman, Arye L, 1982. "Declining Industries and Political-Support Protectionist Motives," American Economic Review, American Economic Association, vol. 72(5), pages 1180-1187, December.
    9. Chun, Youngsub & Thomson, William, 1990. "Nash solution and uncertain disagreement points," Games and Economic Behavior, Elsevier, vol. 2(3), pages 213-223, September.
    10. Yew‐Kwang Ng, 1981. "Bentham or Nash? On the Acceptable Form of Social Welfare Functions," The Economic Record, The Economic Society of Australia, vol. 57(3), pages 238-250, September.
    11. Harsanyi, John C, 1995. "Games with Incomplete Information," American Economic Review, American Economic Association, vol. 85(3), pages 291-303, June.
    12. H. Keith Hall & Douglas Nelson, 1992. "Institutional Structure In The Political Economy Of Protection: Legislated V. Administered Protection," Economics and Politics, Wiley Blackwell, vol. 4(1), pages 61-77, March.
    13. Magee,Stephen P. & Brock,William A. & Young,Leslie, 1989. "Black Hole Tariffs and Endogenous Policy Theory," Cambridge Books, Cambridge University Press, number 9780521377003.
    14. Nash, John, 1950. "The Bargaining Problem," Econometrica, Econometric Society, vol. 18(2), pages 155-162, April.
    15. Baldwin, Richard, 1987. "Politically realistic objective functions and trade policy PROFs and tariffs," Economics Letters, Elsevier, vol. 24(3), pages 287-290.
    16. Roth, Alvin E., 1977. "Independence of irrelevant alternatives, and solutions to Nash's bargaining problem," Journal of Economic Theory, Elsevier, vol. 16(2), pages 247-251, December.
    17. Drew Fudenberg & Eric Maskin, 2008. "The Folk Theorem In Repeated Games With Discounting Or With Incomplete Information," World Scientific Book Chapters, in: Drew Fudenberg & David K Levine (ed.), A Long-Run Collaboration On Long-Run Games, chapter 11, pages 209-230, World Scientific Publishing Co. Pte. Ltd..
    18. Grossman, Gene M & Helpman, Elhanan, 1994. "Protection for Sale," American Economic Review, American Economic Association, vol. 84(4), pages 833-850, September.
    19. Van Long, Ngo & Vousden, Neil, 1991. "Protectionist responses and declining industries," Journal of International Economics, Elsevier, vol. 30(1-2), pages 87-103, February.
    20. Thomson, William, 1981. "A class of solutions to bargaining problems," Journal of Economic Theory, Elsevier, vol. 25(3), pages 431-441, December.
    21. Yaari, Menahem E., 1981. "Rawls, edgeworth, shapley, nash: Theories of distributive justice re-examined," Journal of Economic Theory, Elsevier, vol. 24(1), pages 1-39, February.
    22. Jagdish N. Bhagwati, 1982. "Import Competition and Response," NBER Books, National Bureau of Economic Research, Inc, number bhag82-1.
    23. Sen, Amartya K, 1979. "Personal Utilities and Public Judgements: Or What's Wrong with Welfare Economics?," Economic Journal, Royal Economic Society, vol. 89(355), pages 537-558, September.
    24. Coggins, Jay S., 1989. "On the existence and optimality of equilibria in lobbying economies," Faculty and Alumni Dissertations 144662, University of Minnesota, Department of Applied Economics.
    25. repec:bla:ecorec:v:57:y:1981:i:158:p:238-50 is not listed on IDEAS
    26. Aumann, Robert J & Kurz, Mordecai, 1977. "Power and Taxes," Econometrica, Econometric Society, vol. 45(5), pages 1137-1161, July.
    27. Chun, Youngsub, 1988. "Nash solution and timing of bargaining," Economics Letters, Elsevier, vol. 28(1), pages 27-31.
    28. John C. Harsanyi & Reinhard Selten, 1972. "A Generalized Nash Solution for Two-Person Bargaining Games with Incomplete Information," Management Science, INFORMS, vol. 18(5-Part-2), pages 80-106, January.
    29. Carlsson, Hans, 1991. "A Bargaining Model Where Parties Make Errors," Econometrica, Econometric Society, vol. 59(5), pages 1487-1496, September.
    30. repec:bla:kyklos:v:36:y:1983:i:3:p:469-81 is not listed on IDEAS
    31. Coggins, Jay S & Graham-Tomasi, Theodore & Roe, Terry L, 1991. "Existence of Equilibrium in a Lobbying Economy," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 32(3), pages 533-550, August.
    32. Ronald Findlay & Stanislaw Wellisz, 1983. "Some Aspects of the Political Economy of Trade Restrictions," Kyklos, Wiley Blackwell, vol. 36(3), pages 469-481, August.
    33. Alvin E Roth, 2008. "Axiomatic Models of Bargaining," Levine's Working Paper Archive 122247000000002376, David K. Levine.
    34. Ronald Findlay & Stanislaw Wellisz, 1982. "Endogenous Tariffs, the Political Economy of Trade Restrictions, and Welfare," NBER Chapters, in: Import Competition and Response, pages 223-244, National Bureau of Economic Research, Inc.
    35. Neary, J Peter, 1978. "Short-Run Capital Specificity and the Pure Theory of International Trade," Economic Journal, Royal Economic Society, vol. 88(351), pages 488-510, September.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Richard E. Baldwin & Frédéric Robert-Nicoud, 2007. "Entry and Asymmetric Lobbying: Why Governments Pick Losers," Journal of the European Economic Association, MIT Press, vol. 5(5), pages 1064-1093, September.
    2. Helpman, Elhanan, 1995. "Politics and Trade Policy," Foerder Institute for Economic Research Working Papers 275606, Tel-Aviv University > Foerder Institute for Economic Research.
    3. Pravin Krishna & Devashish Mitra, 2003. "Reciprocated Unilateralism in Trade Policy: An Interest-Group Approach," NBER Working Papers 9631, National Bureau of Economic Research, Inc.
    4. Theo S Eicher & Thomas Osang, 2000. "Politics and Trade Policy: An Empirical Investigation"," Working Papers 0004, University of Washington, Department of Economics.
    5. Dutt, Pushan & Mitra, Devashish, 2009. "Explaining Agricultural Distortion Patterns : The Roles of Ideology, Inequality, Lobbying and Public Finance," Agricultural Distortions Working Paper Series 50299, World Bank.
    6. Robert W. Staiger & Kyle Bagwell, 1999. "An Economic Theory of GATT," American Economic Review, American Economic Association, vol. 89(1), pages 215-248, March.
    7. Pyne, Derek, 2006. "Microfoundations of Influencing Public Opinion: Lobbying and Voting for Trade Policies," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 21, pages 551-576.
    8. kishore gawande & pravin krishna, 2005. "The Political Economy of Trade Policy: Empirical Approaches," International Trade 0503003, University Library of Munich, Germany.
    9. Yasar, Mahmut, 2013. "Political Influence of Exporting and Import-Competing Firms: Evidence from Eastern European and Central Asian Countries," World Development, Elsevier, vol. 51(C), pages 154-168.
    10. Weck-Hannemann, Hannelore, 1989. "Protectionism in direct democracy," Discussion Papers, Series II 79, University of Konstanz, Collaborative Research Centre (SFB) 178 "Internationalization of the Economy".
    11. Bin, Sheng, 2000. "The Political Economy of Trade Policy in China," Working Papers 10/2000, Copenhagen Business School, Department of Management, Politics & Philosophy.
    12. Robert Pahre, 1998. "Reactions and Reciprocity," Journal of Conflict Resolution, Peace Science Society (International), vol. 42(4), pages 467-492, August.
    13. Joan Esteban & József Sákovics, 2002. "Endogenous bargaining power," Economics Working Papers 644, Department of Economics and Business, Universitat Pompeu Fabra.
    14. Grossman, Gene M & Helpman, Elhanan, 1994. "Protection for Sale," American Economic Review, American Economic Association, vol. 84(4), pages 833-850, September.
    15. Rodrik, Dani, 1994. "What does the Political Economy Literature on Trade Policy (Not) Tell Us That We Ought to Know?," CEPR Discussion Papers 1039, C.E.P.R. Discussion Papers.
    16. Grossman, Gene M & Helpman, Elhanan, 1995. "Trade Wars and Trade Talks," Journal of Political Economy, University of Chicago Press, vol. 103(4), pages 675-708, August.
    17. Bagwell,K. & Staiger,R.W., 2000. "GATT-think," Working papers 19, Wisconsin Madison - Social Systems.
    18. Kjell Hausken, 1997. "Game-theoretic and Behavioral Negotiation Theory," Group Decision and Negotiation, Springer, vol. 6(6), pages 511-528, December.
    19. Nuno Limão & Arvind Panagariya, 2003. "Why is there an Anti-trade Bias in Trade Policy?," International Trade 0310003, University Library of Munich, Germany.
    20. Kishore Gawande & Pravin Krishna & Michael J. Robbins, 2006. "Foreign Lobbies and U.S. Trade Policy," The Review of Economics and Statistics, MIT Press, vol. 88(3), pages 563-571, August.

    More about this item

    Keywords

    endogenous-tariff; comparative statics; Nash bargaining games; CGE models; political economy;
    All these keywords.

    JEL classification:

    • C6 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling
    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wpa:wuwpit:9609001. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: EconWPA (email available below). General contact details of provider: https://econwpa.ub.uni-muenchen.de .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.