Working Paper: CEPR ID: DP4077
Authors: Hiau Looi Kee; Marcelo Olarreaga; Peri Silva
Abstract: This Paper assesses the foreign lobbying forces behind the tariff preferences that the United States grants to Latin American countries. The basic framework is one developed by Grossman and Helpman (1994) that is extended to explain the relationship between foreign lobbying and tariff preferences. Results suggest that returns to Latin American exporters lobbying for tariff preferences in the United States are above 50%. The reason for these large returns is the relatively low estimated weight given to social welfare in the US government?s objective function when deciding whether or not to grant tariff preferences to LAC exporters.
Keywords: Latin America; Political Economy; Trade; United States
JEL Codes: F10; F11; F13
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Lobbying by Latin American exporters (F13) | Variation in tariff preferences (F14) |
| Lobbying expenditures (D72) | Extent of tariff preferences received (F14) |
| Weight assigned to social welfare (I38) | Influence of lobbying efforts on policy outcomes (D72) |
| Returns on lobbying (D72) | Lobbying efforts (D72) |