The Political Market for Protection in Industrial Countries

Abstract

One of the strongest conclusions following from neoclassical trade theory is that protection of domestic industries from import competition generally lowers average real income in a country unless that country’s trade volume is so large that changes in it affect international prices. Why, then, is protection so pervasive? Is it because some individuals and groups in society are more politically powerful than others and so are able to influence policies in their favour despite undesired costs to the rest of the community? Or is it that in granting protection governments are reflecting the preferences of the community and government officials in assisting certain industries for such ‘non-economic’ reasons as maintaining employment in those otherwise declining industries? 1 These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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