SPURIOUS INJURY AS INDIRECT RENT SEEKING: FREE TRADE UNDER THE PROSPECT OF PROTECTION
In the literature on directly unproductive profit seeking or rent seeking, intervention-seeking by labor and industry groups is generally restricted to direct lobbying activity. However, import-competing producers may have an additional instrument to influence the decision to grant protection. Under well-established injury criteria for protection import-competing producers have an incentive, either collectively or individually, to feign injury. To the extent that the free-rider problem can be overcome, orchestrating the appearance of injury is an intervention-seeking activity that may be complementary to DUP lobbying. When the established indicators of industry well-being include variables controlled by the prospective beneficiaries, therefore, free trade under the prospect of protection is potentially accompanied by a concomitant spurious-injury distortion. Some of the positive and welfare implications of the theory of spurious injury are investigated in both a partial equilibrium framework and in the Heckscher-Ohlin model. Copyright 1991 Blackwell Publishers Ltd..
Year of publication: |
1991
|
---|---|
Authors: | Leidy, Michael P. ; Hoekman, Bernard M. |
Published in: |
Economics and Politics. - Wiley Blackwell. - Vol. 3.1991, 2, p. 111-137
|
Publisher: |
Wiley Blackwell |
Saved in:
freely available
Saved in favorites
Similar items by person
-
"Cleaning up" while cleaning up : pollution abatement, interest groups and contingent trade policies
Leidy, Michael P., (1991)
-
Dumping, antidumping, and emergency protection
Hoekman, Bernard M., (1989)
-
Policy responses to shifting comparative advantage : designing a system of emergency protection
Hoekman, Bernard M., (1989)
- More ...