An Empirical Analysis of the Political Economy of Tariffs

We seek to analyze the determinants of senatorial response to "generic" trade bills that seek to impose restrictions on the lowering of tariffs. The analysis is based on the response of senators to the trade expansion acts of 1962 and 1974. In the recent past these have been the only bills that are "generic" in nature since they are not targeted at any particular industry. Within the same framework we also examine the issue of "legislator shirking", a term used to imply the response of senators based on pure personal ideology rather than the interests of the constituents. Regression results show the growing influence of state specific factors and the diminishing role of party and personal ideology on senatorial response. Interestingly, we find that despite the similar generic nature of the two bills examined, the influence of personal ideology on the response of senators varies across the two bills examined.     

Political Support for Tax Decentralization

We present a spatial model of a city with two unequally productive jurisdictions. City residents bear a commuting cost to work in either of the two jurisdictions. Each jurisdiction must finance a public budget with a wage and a head tax. We compare the first best optimum to tax decentralization. From the total welfare viewpoint, tax competition is always inefficient. However, majoritarian local governments may prefer the inefficient tax decentralization to the first best.     

A Political‐Economic Account of Global Tariffs

The objective of this paper is to evaluate the relative importance of three distinct factors that motivate redistributive government policy: tariff revenues, consumer welfare, and producer profits. We generalize Grossman and Helpman's (1994, American Economic Review 84: 833–850). protection‐for‐sale model by positing that government places different weights on these components of the welfare of its polity when it decides which industries to protect and to what extent. Employing tariff data from 40 countries, the predictions from this model are used to estimate these weights. The results are surprising in their range and variety. Developing countries with weak tax systems often weigh tariff revenue heavily, while more developed countries weigh producer interests the most. Very few hold consumer welfare dear.     

Life Expectancy Heterogeneity and the Political Support for Collective Annuities

Individuals, differing in productivity and life expectancy, vote over the size and type of a collective annuity. Its type is represented by the fraction of the contributive (Bismarckian) component (based on the worker's past earnings) as opposed to the non‐contributive (Beveridgean) part (based on average contribution). The equilibrium collective annuity is either a large mostly Bismarckian program, a smaller pure Beveridgean one (in accordance with empirical evidence), or nil. A larger correlation between longevity and productivity, or a larger average life expectancy, both make the equilibrium collective annuity program more Beveridgean, although at the expense of its size.     

Regional Integration and Lobbying for Tariffs Against Nonmembers

We study the impact of regional trading arrangements (RIAs) on tariff policy toward nonmembers in a three-good, three-country political economy model. Comparing free-trade areas (FTAs) with and without rules of origin and customs unions (CUs) with varying degrees of economic and political integration, we show how increasingly deep integration can lead to rising protection against nonmember imports. Other differences between FTAs and CUs, like the extent of free-riding in a CU and any component of a CU's tariff designed to improve the members' terms of trade, are not explicitly accounted for. Nevertheless, the results suggest that FTAs are likely to welfare dominate CUs.     

Tariffs,Offshoring and Unemployment in A Two‐Country Model

This paper develops a two‐country model that incorporates offshoring opportunities, and analyses the effects of tariffs under economic stagnation in a liquidity trap that causes unemployment. We find that a rise in tariffs on imports of outsourced goods contributes to an increase in employment by inducing a shift in production, but also leads to an appreciation of the real exchange rate that tends to reduce employment. The effect of real exchange rate appreciation dominates the effect of the production shift, and accordingly employment and consumption fall. The effects of tariff adjustments are reversed, however, when there is no liquidity trap and hence no unemployment.     

Cross‐border Lobbying in Preferential Trading Agreements: Implications for External Tariffs and Welfare

This paper examines the effect of cross‐border lobbying on domestic lobbying and on external tariffs in both Customs Union (CU) and Free Trade Area (FTA). We do so by developing a two‐stage game which endogenizes the tariff formation function in a political economic model of the directly unproductive rent‐seeking activities type. We find that cross‐border lobbying un‐ambiguously increases both domestic lobbying and the equilibrium common external tariffs in a CU. The same result also holds for FTA provided tariffs for the member governments are strategic complements. We also develop a specific oligopolistic model of FTA and show that tariffs are indeed strategic complements in such a model.     

Analyzing the System of Preferential Tariffs for Least Developed Countries

This paper analyzes the rents available from non‐reciprocal preferential tariffs for least developed countries (LDCs) on all exports to the quad countries at the tariff line level. Most of the rents come from the European Union (EU) in clothing and textiles, while the USA and Canada offer few rents and charge significant tariffs to LDCs. We develop a dual economy labor market model that generates an income distribution and simulates the distributional effects of preferences. We find that the benefits of the preferences outweigh any adverse distributional effects. Relative inequality may increase with preferences in some cases, but absolute incomes increase in every case. We conclude that in the absence of multilateral liberalization, preferences are beneficial to some LDCs and expansion of preferences is desirable. In the event of multilateral liberalization, an import subsidy scheme that maintains the rents is the most desirable outcome.     

Lobbying,Family Concerns,and the Lack of Political Support for Estate Taxation

We provide an explanation for why estate taxation is surprisingly little used, given the skewness of the estate distribution. Taxing estates implies meddling with intra‐family decisions, which is frown upon by many. At the same time, given the concentration of estates a small proportion of the population stands to gain a lot by decreasing estate taxation. We provide an analytical model, together with numerical simulations, where agents bequeathing large estates make monetary contributions to play up the salience of the encroachment aspects of estate taxation on family decisions and to decrease its political support.     

中国农业国内支持乏力及其政治经济学解释

农业是天然的弱势产业,农业发展离不开政府的大力支持,但是,我国的农业却严重缺乏政府的足够支持。经济学界对此展开了广泛的讨论,本文在描述我国农业支持现状的基础上,运用政治经济学的基本分析方法,从游说成本的角度,进一步解释了造成这种严峻现实的深层次原因。作者希望通过本文的论述,能够为政府有效解决三农问题提供有益的参考。     

Should Smaller Countries Be More Protectionist? The Diversification Motive for Tariffs

This paper examines the diversification motive for tariffs under trade‐related uncertainty when there is incomplete international and domestic risk sharing. In the context of a two‐country Ricardian continuum‐of‐sectors model with shocks to foreign technologies or preferences, tariffs allow a country to mitigate external risk by diversifying across sectors. Given sufficiently high risk and risk aversion, the optimality of tariffs depends primarily on a country's ability to diversify, rather than its market power, such that small countries gain most.     

Tariffs versus quotas in the presence of imperfect competition and cross‐border externalities

Abstract.  We consider trade policies intended to affect the production of a foreign monopolist that generates negative externalities. We derive the optimal tariff and optimal import quota and examine which policy measure should be used to maximize domestic welfare. We find that if the domestic government does not have full information on the foreign firm's production method and if cross‐border externalities exist, import quotas are in some cases preferable to tariffs. Otherwise, however, tariffs are preferable to quotas. JEL Classification: F13, F18     

思想政治教育动态能力形成系统分析

思想政治教育动态能力系统通过与社会、经济、文化等环节进行持续不断的交互作用,通过与环境的输出、输入,不断改变自身的结构和行为方式来推动思想政治教育的变革和创新;动态能力形成系统具有开放性、吸纳性、创新性;对现实问题的探索,是动态能力形成系统的基础;能力动态组合、能力动态协调、组织学习机制是动态能力系统的形成过程.     

A Simple Characterization of the Second‐best Two‐part and Block‐rate Tariffs Theory and Applications

The general necessary optimality conditions for second‐best discrete multipart tariffs are rather complex. In this paper, we derive a simplified characterization of these conditions for two‐part tariffs and for block‐rate tariffs for given thresholds of these tariffs. The simplified necessary optimality conditions are equivalent to the necessary conditions for a Ramsey‐optimum for goods with continuously variable individually demanded quantities. We demonstrate that this characterization of second‐best multipart tariffs can be helpful, when applying the usual regulatory mechanisms to these tariffs. In particular, we consider Vogelsang–Finsinger (1979) regulation as well as a particular form of price‐cap regulation which is related to the Laspeyres index of prices.     

Evidence and explanation for the Tariff-lobbying paradox: endogenous Tariffs fall as protectionist lobbying rises

Recent empirical evidence suggests that U.S. protectionist lobbying expenditures rose while U.S. trade barrier fell. We find that the same result holds in our panel data sample from 28 countries between 1995 and 2011. We find two economic drivers cause the paradox between increasing protectionist lobbying and decreasing trade barrier. First, trade barriers decline as country capital-labour ratio endowments rise because of the rising political and economic power of capital that lobbies for free-trade. Second, factor intensities in production become more similar as factor-intensity convergence. This flattens the production possibility curve between exportable and import-competing production so that changes increased magnification in both factor rewards. In our panel, the magnification parameters are twice as high for capital as for labour (8.6 vs. 5.1). And, the elasticity of the capital return with respect to country capital-labour factor endowment ratios (.59) is nearly twice those of labour (.22). Increased magnification causes thus labour’s increased lobbying for protection to be more than offset by increased capital lobbying against protection. In short, while an increasing labour lobbies for protection as countries advance, combined tariff and non-tariff protection (OTRI) decline significantly as advanced countries get richer. This explains the tariff-protectionist-lobbying paradox.     

Unit Root Tests for Dependent Micropanels

This paper proposes a new test for the null hypothesis of panel unit roots for micropanels with short time dimensions (T) and large cross‐sections (N). There are several distinctive features of this test. First, the test is based on a panel AR(1) model allowing for cross‐sectional dependency, which is introduced by a factor structure of the initial condition. Second, the test employs the panel AR(1) model with AR(1) coefficients that are heterogeneous for finite N. Third, the test can be used both for the alternative hypothesis of stationarity and for that of explosive roots. Fourth, the test does not use the AR(1) coefficient estimator. The effectiveness of the test rests on the fact that the initial condition has permanent effects on the trajectory of a time series in the presence of a unit root. To measure the effects of the initial condition, the present paper employs cross‐sectional regressions using the first time‐series observations as a regressor and the last as a dependent variable. If there is a unit root in every individual time series, the coefficient of the regressor is equal to one. The t‐ratios for the coefficient are this paper's test statistics and have a standard normal distribution in the limit. The t‐ratios are based on the OLS estimator and the instrumental variables estimator that uses reshuffled regressors as instruments. The test proposed in this paper makes it possible to test for a unit root even at T = 2 as long as N is large. Simulation results show that test statistics have reasonable empirical size and power. The test is applied to college graduates' monthly real wage in South Korea. The number of time‐series observations for this data is only two. The null hypothesis of a unit root is rejected against the alternative of stationarity.     

Improving the Performance of a Long‐Run Variance Ratio Test for a Unit Root

Cai and Shintani (2006, Econometric Theory, 22, 347–372) considered the impact of introducing an inconsistent long‐run variance estimator when constructing a class of kernel‐based ratio tests for testing non‐stationarity in the series. They found that the quotient of two estimators with different rates of convergence under the null and the alternative hypotheses may lead to a test having an interesting size and power trade‐off. This paper develops modified versions of this test, presents new asymptotic results and tabulates critical values. The finite sample performance is explored through Monte Carlo simulations. The results show that the modifications proposed lead to more powerful unit root tests.