Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
10477027 | Journal of International Economics | 2005 | 19 Pages |
Abstract
We model the endogenous determination of policy towards international factor mobility. In a common agency setting, domestic interest groups bid for protection from the government and the incumbent politicians maximize a welfare function that depends both on domestic voters' welfare and contributions collected. We characterize equilibrium policies in the price space and show how the degree of complementarity among inputs determines the outcome. We establish a similar result for quotas, allowing for partial rent capturing. For the strategic environment under consideration, we also establish a general equivalence result between tariffs and quotas if capturing is complete.
Related Topics
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Economics and Econometrics
Authors
Giovanni Facchini, Gerald Willmann,