Grossman Helpman (1994) - Protection For Sale
Revision as of 21:50, 4 April 2010 by imported>Ed (New page: ==Reference(s)== Grossman, G. and E. Helpman (1994), Protection for Sale, American Economic Review 84, 833-50. [http://www.edegan.com/pdfs/Grossman%20Helpman%20(1994)%20-%20Protection%20fo...)
Reference(s)
Grossman, G. and E. Helpman (1994), Protection for Sale, American Economic Review 84, 833-50. pdf
Abstract
We develop a model in which special-interest groups make political contributions in order to influence an incumbent government's choice of trade policy. The interest groups bid for protection with their campaign support. Politicians maximize their own welfare, which depends on total contributions collected and on the welfare of voters. We study the structure of protection that emerges in the political equilibrium and the contributions by different lobbies that support the policy outcome. We also discuss why the lobbies may in some cases prefer to have the government use trade policy to transfer income, rather than more efficient means.
