On the endogenous choice between protection and promotion

Research output: Contribution to journalArticle

7 Scopus citations

Abstract

In a model of strategic interaction between firms in lobbying activity, I show that capitalists might prefer tariffs (protection) to production subsidies (promotion). This is due to the congestion problem arising from the government's convex welfare costs of providing subsidies as opposed to both the free-rider problem and the congestion problem acting in opposite directions in the case of tariffs. If an industry association exists, coordination can be achieved when lobbying for tariffs, but not in the case of production subsidies.

Original languageEnglish (US)
Pages (from-to)33-51
Number of pages19
JournalEconomics and Politics
Volume12
Issue number1
DOIs
StatePublished - Mar 2000
Externally publishedYes

ASJC Scopus subject areas

  • Economics and Econometrics

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