Tariff Rate as a Public Good

Author: Yamazaki T.

Source: Review of International Economics, Volume 12, Number 1, February 2004 , pp. 95-107(13)

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Abstract:

If domestic firms lobby for protection, the tariff rate is a public good to all domestic firms, whether they engage in lobbying or not. This paper analyzes how the endogenous tariff rate as a public good depends on the group size in two-stage lobbying models. The result depends not only on whether domestic firms lobby cooperatively or not, but also on whether domestic firms incur indirect lobbying costs or not. This paper shows that if free riding is not very serious and if the number of domestic firms is small compared to the number of foreign firms, entry of a domestic firm is likely to increase the equilibrium tariff rate.

Document Type: Research article

DOI: http://dx.doi.org/10.1111/j.1467-9396.2004.00433.x

Affiliations: 1: Department of Economics, Niigata University, Japan

Publication date: 2004-02-01