Determinants of Trade Protection in Contemporary Democracies: Whose interests do elected officials serve through trade protection?

Earlier economic studies attribute the presence of trade barriers to the fact that protectionist interest groups better articulate their policy demands due to their greater abilities to overcome collective action problems. Contrary to consumer groups, protectionist interests have strong incentive to influence politicians through lobbying and campaign activities since the benefits of protection are concentrated on a small set of producers but the costs are dispersed to the entire population. Thus, as in the literature on endogenous tariff formation, these studies restrict their focus to analyzing patterns in trade policy outcomes which are generated by societal demands for protection and the relative abilities of industries to get organized to lobby governments. On the other hand, institutional explanations of trade protection concentrate more on clarifying under what circumstances policymakers are insulated from particular interests of protectionist interests and lower levels of trade barriers for diffuse interests. A common argument found in this approach is that the formal design and nature of domestic political institutions generate cross-national variations in trade protection by shaping incentives of representatives to provide public goods (here, free trade) for the general welfare of a society as a whole.