Declining Industries and Political-Support Protectionist Motives

Hillman, Arye L.

doi:10.1007/978-3-540-79247-5_5

Cited by 203 publications

(206 citation statements)

References 22 publications

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“…Rent-seeking concepts were integrated into models of international trade restrictions (Hillman 1982) and used to explore the extent to which institutions might evolve to mitigate such losses (Congleton 1980). The effects that alternative contest designs and interests have on losses from rent-seeking contests were explored in a long series of theoretical papers by, for example, van Long and Vousden (1987) and Nitzan (1991).…”

Section: Interest Groups and Public Policymentioning

confidence: 99%

Intellectual foundations of public choice, the forest from the trees

Congleton

2018

Public Choice

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After War World II, a group of scholars began using rational choice models from economics and game theory to examine the manner in which public policies would be determined if men and women were as "rational" in their political activities as they were in other spheres of life. The implications of such an approach to politics were not obvious and took decades to be worked out. Indeed, they are still being worked out. The result was a new field of research that deepened our understanding of economic and political systems and their many interdependencies. This review essay provides an overview of the core findings of public choice during its first half century and of the boot-strapping process through which those findings emerged. Those core findings provide the idea base and results that ground most contemporary public choice research. Keywords

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Section: Interest Groups and Public Policymentioning

confidence: 99%

Intellectual foundations of public choice, the forest from the trees

Congleton

2018

Public Choice

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“…One can think of a stylized political economy model of trade protection, along the lines of Hillman (1982;1989). Consider a domestic government aiming to maximize its own objective function.…”

Section: Political Economy Implications In a Nutshellmentioning

confidence: 99%

Strategic Trade Policy in General Oligopolistic Equilibrium

Colacicco

2012

SSRN Journal

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In a two-country general oligopolistic equilibrium model, I study how crosssector strategic trade policy affects wages, countrywide profits, and welfare. Firms face resource constraints and wages are simultaneously determined. Relative to free trade, cross-sector protectionism generates a reduction in the foreign wage without affecting the domestic wage. Domestic countrywide profits benefit from small import tariffs, whereas the foreign counterpart is hit, but when sectors share the same technology. Domestic welfare is unambiguously penalized. Hence, the general-equilibrium cross-sector perspective goes against the textbook version theory of the optimal tariff in partial equilibrium. Rationalization of these effects suggests a politicaleconomy view on tariff formation in general equilibrium. JEL:D43 AbstractIn a two-country general oligopolistic equilibrium model, I study how cross-sector strategic trade policy affects wages, countrywide profits, and welfare. Firms face resource constraints and wages are simultaneously determined. Relative to free trade, cross-sector protectionism generates a reduction in the foreign wage without affecting the domestic wage. Domestic countrywide profits benefit from small import tariffs, whereas the foreign counterpart is hit, but when sectors share the same technology. Domestic welfare is unambiguously penalized. Hence, the general-equilibrium cross-sector perspective goes against the textbook version theory of the optimal tariff in partial equilibrium. Rationalization of these effects suggests a political-economy view on tariff formation in general equilibrium.

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“…We describe the political economy side of the model via a political support function (Hillman, 1982;Long and Vousden, 1991), which, as GH and others have shown, can be obtained by modeling the interaction of lobbies and the government from first principles. This representation allows us to focus directly on the conditions for ATB and has the advantage of accommodating alternative theories of demand for trade policy.…”

Section: Equilibrium Trade Policymentioning

confidence: 99%