《Endogenous trade policy through majority voting》.pdf

Journal of International Economics 58 (2002) 107–133 /locate/econbase Endogenous trade policy through majority voting: an empirical investigation a b , * Pushan Dutt , Devashish Mitra a Department of Economics, University of Alberta, Edmonton, Canada T6 G 2H4 bDepartment of Economics, Florida International University, Miami, FL 33199, USA Received 4 October 2000; received in revised form 14 May 2001; accepted 23 August 2001 Abstract The median-voter approach to trade policy determination (within a Heckscher-Ohlin framework) as in Mayer [Am. Econ. Rev. 74(5) (1984) 970] predicts that an increase in inequality, holding constant the economy’s overall relative endowments, raises trade barriers in capital-abundant economies and lowers them in capital-scarce economies. We find support for this prediction using cross-country data on inequality, capital-abundance and diverse measures of protection. We perform certain robustness checks that include controlling for the effects of political rights and schooling as well as using alternative datasets on factor endowments.  2002 Elsevier Science B.V. All rights reserved. Keywords : Protection; Openness; Median voter; Inequality 1. Introduction The median-voter approach, with its focus on majoritarian electoral politics, has been applied quite extensively to diverse political economy issues. This approach and its predictions are best interpreted when the concept of the median voter is not taken literally, but viewed as a convenient