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Discussion Paper Details

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Title: Lobbying and the Structure of Protection

Author(s): Olivier Cadot, Jaime de Melo and Marcelo Olarreaga

Publication Date: February 1997

Keyword(s): Endogenous Tariff and Political Economy

Programme Area(s): International Trade and Regional Economics

Abstract: This paper extends the influence-driven model of trade policy determination to include general equilibrium effects on the supply side resulting from labour-market interaction and intermediate goods. The model?s predictions for the structure of protection are related to underlying taste and technology parameters, and we derive analytically several propositions that are consistent with the stylized results of the empirical literature. Finally, numerical simulations are carried out for archetypal ?rich? and ?poor? economies. It turns out that the endogenously-determined structure of protection is broadly consistent with the observed pattern of protection in rich and poor economies, suggesting the usefulness of the approach.

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Bibliographic Reference

Cadot, O, de Melo, J and Olarreaga, M. 1997. 'Lobbying and the Structure of Protection'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=1574