TY  - JOUR
AU  - Maggi,Giovanni
AU  - Rodriguez-Clare,Andres
TI  - Import Peneteration and the Politics of Trade Protection
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 6711
PY  - 1998
Y2  - August 1998
UR  - http://www.nber.org/papers/w6711
L1  - http://www.nber.org/papers/w6711.pdf
N1  - Author contact info:
Giovanni Maggi
Department of Economics
Yale University
37 Hillhouse Avenue Rm 27
New Haven, CT 06511
Tel: 203/432-3569
Fax: 203/432-6323
E-Mail: giovanni.maggi@yale.edu

Andres Rodriguez-Clare
University of California at Berkeley
Department of Economics
Berkeley, CA 94720-3880
E-Mail: andres1000@gmail.com
AB  - In this paper we reconsider a key empirical prediction generated by an important class of political-economy models of trade policy, namely that trade protection should be higher in sectors characterized by lower import penetration (we call this the little support for this prediction.  In this paper we argue that the standard prediction depends critically on the assumptions that trade taxes are the only policy instruments and that the government has access to non-distortionary taxation.  We analyze a model in which the government can use quotas and VERs in addition to trade taxes and raising public funds may be costly. Under a simple sufficient condition, our model predicts that the protection level increases with import penetration, both in sectors that are protected with tariffs and in sectors that are protected with quantitative restrictions.
ER  -