Item Details
Skip Navigation Links
   ActiveUsers:4055Hits:20929894Skip Navigation Links
Show My Basket
Contact Us
IDSA Web Site
Ask Us
Today's News
HelpExpand Help
Advanced search

In Basket
  Journal Article   Journal Article
 

ID118174
Title ProperFree riding and protection for sale
LanguageENG
AuthorGawande, Kishore ;  Magee, Christopher
Publication2012.
Summary / Abstract (Note)Olson hypothesized that a latent group's ability to organize and contribute toward providing a public good might be jeopardized by free riding. The politics of trade protection feature the collective action problem, since protection benefits all firms in the industry including those who contributed nothing to attaining it. This paper examines the extent of free riding in lobbying over tariffs in the context of the Grossman and Helpman (1994) protection-for-sale model in which industry lobbies seek to bend government policy in their favor. Previous investigations of the model have produced the puzzling result that governments are largely welfare-maximizing and care little about campaign contributions, in contrast to numerous examples of welfare-reducing policies that have in fact been bought cheaply by special interests. We think the result arises because the model assumes away free riding by firms which hinders industry's ability to organize politically. We introduce free riding into the Grossman-Helpman model, allowing industries to be partially organized. Using a new data set on US trade barriers, we test the model using estimation methods new to this literature. The estimates support the model's predictions and reveal that the extent of free riding by manufacturing firms can help resolve the puzzling result.
`In' analytical NoteInternational Studies Quarterly Vol. 56, No.4; Dec 2012: p.735-747
Journal SourceInternational Studies Quarterly Vol. 56, No.4; Dec 2012: p.735-747
Key WordsPolitics of Trade Protection ;  US Trade Barriers ;  United States


 
 
Media / Other Links  Full Text