Endogenous trade policy through majority voting: an empirical investigation |
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Authors: | Pushan Dutt |
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Institution: | a Department of Economics, University of Alberta, Edmonton, Canada T6G 2H4 b Department of Economics, Florida International University, Miami, FL 33199, USA |
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Abstract: | The median-voter approach to trade policy determination (within a Heckscher-Ohlin framework) as in Mayer Am. Econ. Rev. 74(5) (1984) 970] predicts that an increase in inequality, holding constant the economy’s overall relative endowments, raises trade barriers in capital-abundant economies and lowers them in capital-scarce economies. We find support for this prediction using cross-country data on inequality, capital-abundance and diverse measures of protection. We perform certain robustness checks that include controlling for the effects of political rights and schooling as well as using alternative datasets on factor endowments. |
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Keywords: | Protection Openness Median voter Inequality |
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