01 July 2017
- RSIS
- Publication
- External Publications
- Party Competition and the Inter-Industry Structure of US Trade Protection
Party Competition and the Inter-Industry Structure of US Trade Protection
Why do some declining industries receive more compensation through protectionist policies than others, even without actively engaging in lobbying? How does the political representation of industries affect their chances for protectionist relief? This paper argues that political parties seek to optimize electoral returns through the strategic allocation of distributive benefits generated by trade barriers. The inter-industry structure of protection is thus explained by the interaction between industries’ trade preferences and political characteristics. Using data on protection and subnational employment for US industries and district-level election outcomes in the 1990s, this paper finds that the concentration of industries in competitive constituencies not only increases their chances of receiving higher tariffs, but also magnifies the marginal effect of comparative disadvantage on tariff and nontariff protection.
Why do some declining industries receive more compensation through protectionist policies than others, even without actively engaging in lobbying? How does the political representation of industries affect their chances for protectionist relief? This paper argues that political parties seek to optimize electoral returns through the strategic allocation of distributive benefits generated by trade barriers. The inter-industry structure of protection is thus explained by the interaction between industries’ trade preferences and political characteristics. Using data on protection and subnational employment for US industries and district-level election outcomes in the 1990s, this paper finds that the concentration of industries in competitive constituencies not only increases their chances of receiving higher tariffs, but also magnifies the marginal effect of comparative disadvantage on tariff and nontariff protection.
