Is Protection for Sale? Evidence on the Grossman-Helpman Theory of Endogenous Protection
Grossman and Helpman (1994) present a theory of endogenous protection by explicitly modeling government-industry interactions for which mere "black-box" models previously existed. They obtain a Ramsey pricing-type solution to the provision of protection which emphasizes the role of inverse...
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| Veröffentlicht in: | The review of economics and statistics 2000-02, Vol.82 (1), p.139-152 |
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| creator | Gawande, Kishore Bandyopadhyay, Usree |
| description | Grossman and Helpman (1994) present a theory of endogenous protection by explicitly modeling government-industry interactions for which mere "black-box" models previously existed. They obtain a Ramsey pricing-type solution to the provision of protection which emphasizes the role of inverse import penetration ratios and import elasticities. On the lobbying side, the model makes predictions about lobbying competition and lobbying spending according to deadweight costs from protection. The model not only makes for richer theory in terms of rigor and elegance, but its predictions are directly testable. Whether the Grossman-Helman model stands up to real-world data is investigated in this paper. Predictions from both the protection side and lobbying side are tested using cross-sectional U.S. nontariff barrier data. We also compare the "second-generation" Grossman-Helpman model with a more traditional specification. Our results call for serious consideration of this model in the political economy literature. |
| doi_str_mv | 10.1162/003465300558579 |
| format | Article |
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Evidence on the Grossman-Helpman Theory of Endogenous Protection</title><source>Periodicals Index Online</source><source>JSTOR Mathematics & Statistics</source><source>EBSCOhost Business Source Complete</source><source>JSTOR Archive Collection A-Z Listing</source><source>MIT Press Journals</source><creator>Gawande, Kishore ; Bandyopadhyay, Usree</creator><creatorcontrib>Gawande, Kishore ; Bandyopadhyay, Usree</creatorcontrib><description>Grossman and Helpman (1994) present a theory of endogenous protection by explicitly modeling government-industry interactions for which mere "black-box" models previously existed. They obtain a Ramsey pricing-type solution to the provision of protection which emphasizes the role of inverse import penetration ratios and import elasticities. On the lobbying side, the model makes predictions about lobbying competition and lobbying spending according to deadweight costs from protection. The model not only makes for richer theory in terms of rigor and elegance, but its predictions are directly testable. Whether the Grossman-Helman model stands up to real-world data is investigated in this paper. Predictions from both the protection side and lobbying side are tested using cross-sectional U.S. nontariff barrier data. We also compare the "second-generation" Grossman-Helpman model with a more traditional specification. 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We also compare the "second-generation" Grossman-Helpman model with a more traditional specification. 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Evidence on the Grossman-Helpman Theory of Endogenous Protection</atitle><jtitle>The review of economics and statistics</jtitle><date>2000-02-01</date><risdate>2000</risdate><volume>82</volume><issue>1</issue><spage>139</spage><epage>152</epage><pages>139-152</pages><issn>0034-6535</issn><eissn>1530-9142</eissn><abstract>Grossman and Helpman (1994) present a theory of endogenous protection by explicitly modeling government-industry interactions for which mere "black-box" models previously existed. They obtain a Ramsey pricing-type solution to the provision of protection which emphasizes the role of inverse import penetration ratios and import elasticities. On the lobbying side, the model makes predictions about lobbying competition and lobbying spending according to deadweight costs from protection. The model not only makes for richer theory in terms of rigor and elegance, but its predictions are directly testable. Whether the Grossman-Helman model stands up to real-world data is investigated in this paper. Predictions from both the protection side and lobbying side are tested using cross-sectional U.S. nontariff barrier data. We also compare the "second-generation" Grossman-Helpman model with a more traditional specification. Our results call for serious consideration of this model in the political economy literature.</abstract><cop>238 Main St., Suite 500, Cambridge, MA 02142-1046, USA</cop><pub>MIT Press</pub><doi>10.1162/003465300558579</doi><tpages>14</tpages></addata></record> |
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| source | Periodicals Index Online; JSTOR Mathematics & Statistics; EBSCOhost Business Source Complete; JSTOR Archive Collection A-Z Listing; MIT Press Journals |
| subjects | Coefficients Deadweight loss Economic competition Economic models Imports Intermediate goods Lobbying Modeling Nontariff barrier Tariffs |
| title | Is Protection for Sale? Evidence on the Grossman-Helpman Theory of Endogenous Protection |
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