PSCI 4356 Lecture Notes - Lecture 1: Infant Industry Argument, Imperfect Competition, Reciprocal Tariff Act
Document Summary
In weak states, interest groups have a lot of power to hijack trade policy: collective action and trade policy. Consumers are distributed and have a hard time organizing. It differs in different kinds of systems. Geographically concentrated industries were more likely to organize and ask for policy. Geographically diverse industries were able to mobilize more representation in the end. Politicians chose trade policy strategically to gain campaign nancing. Before 1934, trade policy was made in congress. 1930 smoot-hawley act sets the us average tariff at 60% Fdr requests the 1934 reciprocal trade agreements act (rtaa: magee, brock, and young model of trade policy, who makes trade policy, moves tariff-setting authority to the executive, ties tariff reduction to foreign concessions. Protectionist groups have been much less successful since then. Countries that delegate trade policy to presidents tend to get more liberal trade policies. High party discipline systems reduce the effects of protectionist demands. Increasing the local price increases the world price.