How Does Trade Policy Get Decided?

Abstract: The interests of districts play a crucial role in trade policymaking. Districts with heterogenous political and economic preferences form coalitions and bargain in the legislature to reach an acceptable trade policy. Such complicated process has been overlooked in canonical political economy models of trade. Our work brings to focus the role districts play in the political process by proposing a model that aggregates heterogeneous district preferences into a national trade policy. The approach uncovers districts and sectors that are more influential in the political process and identifies regional political winners and losers created by the policy.

Keywords: trade policy;

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Bibliographic Information

Provider: Federal Reserve Bank of Richmond

Part of Series: Richmond Fed Economic Brief

Publication Date: 2022-03

Volume: 22

Issue: 11