The limits of rent seeking: why protectionists become free traders

Author: Lusztig M.

Source: Review of International Political Economy, Volume 5, Number 1, 1 January 1998 , pp. 38-63(26)

Publisher: Routledge, part of the Taylor & Francis Group

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Abstract:

This article presents the argument that governments can mitigate the political risks associated with significant liberalization of trade by suggesting that under certain conditions, rent-seeking opponents of trade liberalization may actually turn into critically important allies of governments attempting major policy shifts from protectionism to free trade. It argues that where domestic rent seekers are persuaded that the government cannot or will not provide sufficient rents, they may pursue a second-most-preferred strategy that entails attempting to secure access to cheaper factor inputs and access to foreign markets by actively supporting trade liberalization.

Keywords: LIBERALIZATION; RENT; SEEKING; POLICY; INNOVATION; UNITED; STATES; CANADA; MEXICO

Language: English

Document Type: Research article

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