Protectionist demands in globalization
Review of Economic Design, cilt.26, sa.3, ss.345-365, 2022 (SSCI, Scopus)
- Yayın Türü: Makale / Tam Makale
- Cilt numarası: 26 Sayı: 3
- Basım Tarihi: 2022
- Doi Numarası: 10.1007/s10058-021-00275-2
- Dergi Adı: Review of Economic Design
- Derginin Tarandığı İndeksler: Social Sciences Citation Index (SSCI), Scopus, IBZ Online, ABI/INFORM, Business Source Elite, Business Source Premier, EconLit, zbMATH
- Sayfa Sayıları: ss.345-365
- Anahtar Kelimeler: Bargaining, Bayesian game, Manipulation, Open economy, Tariffs, Voting
- Boğaziçi Üniversitesi Adresli: Evet
Özet
We construct a game theoretic model that offers to explain the increase in trade protectionism as a rational reaction of the voters to their increased concern that the policy choices of their governments are being influenced by international actors. More specifically, we construct a small open economy in which the citizens declare their most preferred tariff rate on an import good to their government. While the government has incentive not to deviate too much from the publicly demanded tariff rate, its final decision is determined after bargaining with a foreign lobby which offers benefits to the government in return of lowered tariffs. We show that the expectation of such foreign influence affects the citizens’ voting behavior. Namely, they tend to vote for more protectionist policies. Moreover, this behavior leads to an increase in benefits by the foreign lobby to the government.