Lobbying, Counterlobbying, and the Structure of Tariff Protection in Poor and Rich Countries |
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| Authors: | Cadot, Olivier de Melo, Jaime Olarreaga, Marcelo |
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| Affiliation: | Olivier Cadot is professor of Economics at École de Hautes Études Commerciales, Univerité de Lausanne; his e-mail address is olivier.cadot{at}hec.unil.ch. Jaime de Melo is professor of Economics, Department of Political Economy, University of Geneva; his e-mail address is demelo{at}ecopo.unige.ch. Marcelo Olarreaga is senior economist in the Development Economics Research Group at the World Bank; his e-mail address is molarreaga{at}worldbank.org |
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| Abstract: | A political economy model of protection is used to determineendogenously the intersectoral patterns of protection. Threepropositions are derived that are consistent with the stylizedpatterns of tariff protection in rich and poor countries: Nominalprotection rates escalate with the degree of processing, protectionis higher on average in poor countries, and rich countries protectagriculture relatively more than they protect manufacturing,whereas poor countries do the reverse. Numerical simulationsfor archetypal rich and poor economies confirm that the endogenouslydetermined structure of protection is broadly consistent withobserved patterns of protection. |
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