Citation

Discussion Paper Details

Please find the details for DP4168 in an easy to copy and paste format below:

Full Details   |   Bibliographic Reference

Full Details

Title: India's Trade Policy For Sale: How Much? Who Buys?

Author(s): Olivier Cadot, Jean-Marie Grether and Marcelo Olarreaga

Publication Date: December 2003

Keyword(s): India, political economy and protection

Programme Area(s): International Trade and Regional Economics

Abstract: This Paper proposes a new method to test the Grossman-Helpman model of endogenous protection and lobby formation. This method, which does not require outside data on lobbies or contributions, identifies politically organized industries for trade protection purposes and calculates equilibrium contributions directly from the model using structural parameter estimates. Its emphasis on vertical inter-industry linkages makes it also possible to trace the effects of duty drawbacks and counter-lobbying from downstream users on endogenous protection. Applied to India, it yields results that are qualitatively consistent with the model?s predictions and that seem quantitatively more plausible than estimates given for the US by alternative methods. The weight on social welfare in the government?s objective function is 5, and the average contribution per ISIC sector is $33 million.

For full details and related downloads, please visit: https://cepr.org/active/publications/discussion_papers/dp.php?dpno=4168

Bibliographic Reference

Cadot, O, Grether, J and Olarreaga, M. 2003. 'India's Trade Policy For Sale: How Much? Who Buys?'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=4168