The Political Economy of the International Protection Cycle |
Gernot Sieg, |
Georg-August-Universität Göttingen |
Copyright ©1997 The Journal of Economic Integration |
ABSTRACT |
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This paper shows why and when a government responds to interest group's pressure for protection in the election period. The result explains how free trade and protectionism succeed one another. The model considered is a two country differential game with both pro-protectionist interest groups of import competing industries and anti-protectionist interest groups of export industries. If the pro-protectionist interest groups are able to obtain protection and voters are important, the level of protection is decreasing towards the end of the election period whenever the government expects losing the election with a positive probability. (JEL Classification: F13) |
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