collusion collective action and protection theory and evidence this paper provides a novel explanation forthe formation of protectionist lobby groupsin imperfectly competitive sectors thelevel of collusion is shown to be a crucialdeterminant of the ability of firms tosustain lobbying we show that greatercollusion reduces firm contributionsto tariff lobbying when the governmentvalues welfare sufficiently and thecross price elasticity between the domesticand foreign goods is sufficiently high the empirical evidence from the u s supports the theory greater collusionreduces the level of pac contributions

international control of subsidies and countervailing duties the range and number of cases of administered protection in the 1 980s suggests that it has begun to play an important role in shaping international trade flows as most of such cases are brought by the united states against developing country exporters they are also a matter of concern for developing countries in the uruguay round of trade negotiations the internationally negotiated code on subsidies and countervailing duties is ambiguous in its definition of legal subsidies and thus in the appropriate use of countervailing duties because the code is applied at the national level there is considerable pressure by domestic producers on administering agents to increase the use of such protective measures through the adoption of provisional measures while the investigation is being conducted and through the interpretation of criteria for coverage given that the most successful developing countries have been those which adopt the most neutral policies toward imported and domestic goods and between sectors domestically the very biased application of the subsidies and the trade policy distortions common in the countries examined together with the frequency of countervailing actions against the subsidies suggest that developing countries would benefit from abandonment of the subsidies in september of 1986 the world s trading nations agreed to begin a new round of multilateral trade negotiations to be called the uruguay round the previous negotiations the tokyo round ended in 1979 in the six intervening years 1980 85 seven countries and the european community eec initiated 1 155 antidumping cases there were also 425 antisubsidy cases half a hundred safeguards cases and several hundred other trade practice cases resulting from national attempts to interpret and enforce various international agreements table 1 the sheer number of such cases suggests that the terms and conditions on which goods are traded across national boundaries are being affected by the outcomes of such administrative processes as much as by the gradual unrolling of the tariff reductions agreed at the tokyo round the general agreement on tariffs and trade gatt and the codes which

voter preferences and state regulation of smoking i introduction tobacco taxation and smoking restrictions are two areas of regulation for which states have maintained a high level of control relative to the federal government 1 given this flexibility states have established a wide range of restrictions on smoking in areas such as government workplaces restaurants bars shopping malls indoor arenas and hospitals 2 although most states restrict smoking in hospitals there is considerable variation among states in restrictions in other areas in the 1998 99 period of this study about two thirds of states restricted smoking in restaurants whereas only four states restricted smoking in bars what has led to variation in smoking restrictions across states in a democratic society one would expect voter preferences to play an instrumental role in determining which policies are enacted and which are not this article provides the first empirical exploration of whether state level smoking restrictions are consistent with preferences of the citizenry taking into account both voting behavior and the role of smoking status in influencing whether an individual votes specifically we examine whether voters preferences for smoking restrictions in restaurants bars malls indoor sporting events and hospitals are consistent with state level restrictions on smoking in each of these public areas 3 our research draws on public choice models of policy making by state and local governments voters preferences typically play a central role because voting affects legislators incentives to support regulations 4 public choice research also finds that nonvoter factors may influence state and local policy making 5 in the case of smoking regulations public health advocates or tobacco industry lobbyists might influence regulatory policies the specific building block of our analysis of state restrictions on smoking is information on individuals voting behavior which we link to their smoking status and preferences over smoking restrictions our analysis uses measures of political pressure that account for individual preferences as well as their voting behavior to examine the possible role of interest group pressures we also control for nonvoter influences on smoking regulation including the proportion of the state population who smoke measures of state ideology and size of the tobacco industry with the exception of smoking in bars there is majority support for smoking restrictions unsurprisingly smokers are less supportive of restrictions than are nonsmokers nonetheless even smokers demonstrate a high level of support for many restrictions smokers are also less likely to vote than are nonsmokers even after controlling for other demographic factors the lower voting rate diminishes voter opposition to antismoking regulation but is usually not critical in view of the substantial support that most smoking restrictions have among smokers the political pressure indices for restrictions on smoking in each public area are generally significantly related to the probability that a state restricts smoking in that public area the nonvoter factors such as the smoking rate in the state and tobacco s role in the state economy are rarely influential policy debates over the desirability of smoking restrictions emphasize possible health risks due to exposure to environmental tobacco smoke ets and effects on business profitability the primary argument for expanding smoking restrictions is to protect workers and customers from exposure to ets 6 as our results show voters are generally supportive of smoking restrictions in public areas which would thereby protect workers as well as themselves and other customers however there is a substantial controversy over the extent of health risks associated with exposure to ets the basis for the push by the u s occupational and safety health administration osha for increased smoking restrictions to protect workers is the highly controversial u

the political economy of trade institutions of protection d omestic support for a liberal commercial policy in the u s rests on a commonly accepted set of rules and norms these rules and norms best characterized as a defense of free and fair trade arise from two different traditions the first originated as a political reaction to high trade barriers preceding the great depression central decision makers took as a lesson from the depression period that short term political forces should not determine the level of state intervention into the market the second to protect against unfair trade emanates from a long history of state support for industries that claim foreign producers are pursuing unfair predatory practices established in statute before the depression these rules did not fundamentally change in the postwar period together these decision rules are used to interpret american trade protectionism

economics and the international trade commission negotiated during the 1980s and the u s semiconductor agreement with japan because the u s antidumping and antisubsidy laws are now one of the most important means used to restrict imports the administration of these laws has come under considerable scrutiny many observers are concerned that these laws are being administered in a way which favors u s industries in this paper i attempt to address some of these concerns by determining the extent to which the administration of the u s unfair trade laws is based on the economic criteria specified in the unfair trade legislation in particular this study examines the importance of economic criteria in the antidumping and antisubsidy decisions of the international trade commission itc the itc is one of the most important agencies responsible for administering the u s unfair trade laws and its role extends beyond these laws into other areas including the escape clause the administrative role of the itc in unfair trade cases is to determine whether unfairly traded imports are a cause of material injury to a domestic industry many other authors have examined the basis for itc decisions the results of baldwin 3 and goldstein and lenway 8 provide support for the hypothesis that the itc uses at least some of the legislated economic criteria appropriately both studies examine the escape clause decisions of the itc and find that industries with declining profitability are more likely to receive favorable itc decisions goldstein and lenway 8 also find that the itc is immune to congressional pressures for protection both studies however focus solely on escape clause decisions which represent only a small fraction of itc decisions and do not involve allegations of unfair trade escape clause actions are also different from other itc decisions in that the president must ultimately decide whether relief is warranted

political economy and contingent protection the growing interest in the political economy of protection and the extensive literature which has already developed around the theme are mainly due to the wide gap between what policy makers practice and what economists preach notwithstanding the interesting nuances brought forth by the new trade theory most economists do not seriously contest the superiority of free trade over protection but policy makers in almost all countries practice some form of trade protection further the context within which such practices occur the extent to which they are resorted or the industries that benefit from them do not often seem to conform to the traditional explanations of protection such as optimal tariffs infant industry protection or the new arguments in favour of international rent shifting in specific strategic sectors this being the case the study of the positive theory of trade policy determination has continued to gain ground with economists borrowing concepts from political science most but not all such analyses have attempted to explain tariff protection particularly inter industry differences in nominal or effective tariff rates but successive multilateral trade negotiations have brought down average tariffs to single digit figures also agreement has been reached through the uruguay round negotiations to reduce the levels of some important types of non tariff barriers such as agricultural subsidies and export restraints although the trend has thus been clearly towards a reduction of the levels of protection the use of certain selective unilateral protectionist measures such as anti dumping and countervailing duty ad cvd measures are very much on the increase this has raised genuine fears that the codes and regulations which were meant for a corrective purpose are now being increasingly used for legitimising selective unilateral protection although the political economy analysis of this type of contingent protection is still in its infancy from the trade policy point of view this is an area of considerable importance

retaliation bargaining and the pursuit of free and fair trade that domestic political economic factors are important determinants of a nation s trade barriers has been empirically well established however the question of how effective strategically retaliatory trade barriers are in deterring foreign protectionism has received far less systematic empirical attention in this article we use bilateral nontariff barrier ntb data between the united states and five developed partner countries japan france germany italy and the united kingdom to systematically examine the effectiveness of strategic retaliation we employ a simultaneous tobit model where the home and foreign ntb levels are determined endogenously in a bilateral game the model provides estimates of deterrence coefficients that is the reduction in foreign trade barriers as a result of u s retaliation which we use to characterize the nature of bilateral ntb games our hope is that the empirical results presented here which have realistic though controversial implications will inform u s trade policy

positive feedback the impact of trade liberalization on industry demands for protection contrary to widely accepted theories of interest group demand for protection industries that experience high and rising import competition after a reduction in trade barriers often become less rather than more protectionist in the long term to unravel this paradox i propose and test a theory that explains variation in domestic producer groups demand for protection over time this model of industry behavior suggests that trade liberalization has a positive feedback effect on the policy preferences and political strategies of domestic industries compelling them to adjust to more competitive market conditions and thereby reducing their future demand for protection

competing models of international lending activity abstract four competing models of the world bank s lending to developing countries are constructed and econometrically estimated by pooled time series and cross section data the analysis suggests that a model combining economic and political determinants performs best besides per capita income inflation balance of payment and budget deficit external debt and past growth political determinants such as the capitalist climate or political instability are also important as well as a recipient country s former status as a colony or dominion this politico economic model is successfully used to forecast the distribution of ibrd loans and ida credits among the developing countries

conflict cooperation and commerce the effect of international political interactions on bilateral trade flows the public choice approach to political economy is employed to gain insight into the connection between international politics and trade flows a model is constructed in which importers are assumed to be rational utility maximizers who seek to satisfy international security as well as economic welfare objectives this model of bilateral trade flows reflects contemporary theory in the field of international economics and it explicitly incorporates the general foreign policy orientation of importers among its determinants the model is tested in 16 annual crosssectional estimations 1960 75 for a complete network of 25 countries the findings show considerable support for the hypothesis that trade flows are significantly influenced by broad political relations of amity and enmity between nations the author concludes that nations adjust trade ties to satisfy security as well as economic welfare goals and that a formal political economy of trade should reflect this fact

exchange rates and unfair trade an examination of the changing country pattern of dumping and subsidy complaints by u s companies over time suggests that exchange rate fluctuations are a significant factor in determining case filings especially against japanese companies the inverse relationship observed between filings and the real external value of the u s dollar is consistent both with the traditional or technical interpretation of dumping and subsidy cases and with the view that they are promoted by rent seeking activities of lawyers and economists representing petitioners while this result says nothing about the merits of any particular case it cautions that the prevalence of unfair trade is not exogenous with respect to broader macroeconomic considerations copyright 1989 by mit press

allocation effects of uncertainty on resources in japan this paper provides evidence of a negative association between macroeconomic uncertainty and the cross sectional dispersion of investment rate for a panel of japanese manufacturing firms we show that an increase in uncertainty leads to the narrowing of the cross section dispersion of investment rate and vice versa this finding suggests that firms fixed capital investment behavior becomes more homogeneous in times of increased uncertainty

one lump or two unitary versus bifurcated measures of injury at the usitc i introduction firms that face competition frequently have a number of legal avenues to limit such competition when such competition comes from overseas competitors they might avail themselves of laws to limit imports in the major industrialized countries laws to limit competition from imports fall into two broad categories safeguards and laws against unfairly traded imports safeguards also known as escape clause procedures allow a world trade organization wto member state to temporarily restrict imports when a product is imported to its territory in such increased quantities as to cause or threaten serious injury to competing domestic producers these temporary restrictions quotas or tariffs can either allow the domestic industry to become more competitive or allow an orderly transfer of resources from the industry unfairly traded imports are imports that are subsidized and or dumped that is sold at less than fair value fair value can be the price that the imports are sold for in their home market the price that the imports are sold for in a third country or the estimated cost of production including a profit in accordance with international agreements u s law requires that remedial duties antidumping duties or countervailing duties can only be imposed on unfairly traded imports if these imports have caused or threaten to cause material injury to competing domestic producers the u s international trade commission usitc is responsible for investigating and determining whether unfairly traded imports have caused material injury to a domestic industry the usitc is also responsible for investigating and determining whether a domestic industry that petitions for relief in a safeguard proceeding has suffered serious injury because of increased imports usitc commissioners have adopted a variety of approaches to determining whether dumped or subsidized imports have caused material injury to competing domestic producers an important one that has been used by several commissioners is the unitary approach this approach uses production and prices for the unfairly traded imports the domestic industry and fairly traded imports if any estimates of demand and supply elasticities and dumping or subsidy margins to calculate what the performance of the domestic industry would have been had it not had to compete with unfairly traded imports an alternative approach that has been adopted by more commissioners is the bifurcated approach this approach first asks if the domestic industry has suffered material injury and then asks whether unfairly traded imports contributed to this injury by separating the injury determination into two separate questions the presence of injury and the causation of injury the bifurcated approach is similar to the sort of inquiry that the usitc conducts in its safeguards investigations commissioners who used the unitary approach relied on an explicit economic model to compare actual domestic industry performance with what the performance would have been absent competition from unfairly traded imports in contrast commissioners who used the bifurcated approach rejected formal economic analysis in fact many of them were openly hostile to the use of economic analysis because of these different attitudes toward quantitative economics the unitary approach has also been called the economic approach we adapt an economic model developed to measure the causes of injury in usitc safeguard investigations to measure the effect of unfairly traded imports to domestic industry performance that is the second question under the bifurcated approach we apply this methodology to all usitc unfairly traded import investigations for a time period between two major changes in the law during this period there were commissioners who used the unitary approach and commissioners who used the bifurcated approach

self enforcing trade agreements evidence from time varying trade policy the bagwell and staiger 1990 theory of cooperative trade agreements predicts new tariffs i increase with imports ii increase with the inverse of the sum of the import demand and export supply elasticities and iii decrease with the variance of imports the authors find us import policy during 1997 2006 to be consistent with this theory a one standard deviation increase in import growth the inverse of the sum of the import demand and export supply elasticity and the standard deviation of import growth changes the probability that the us imposes an antidumping tariff by 35 percent by 88 percent and by 76 percent respectively

commercial policy and the domestic carrying trade in this paper the authors examine the economic consequences of existing u s restrictions on trade in domestic water transportation cabotage services they briefly trace the history of u s policy on cabotage the authors also use an applied general equilibrium model of the united states to analyze the effects of the jones act on welfare and on production trade and employment in important upstream and downstream sectors the economic effects of u s maritime policies rank them with u s trade policies like the mfa the automobile and steel quotas of the mid 1980s and agricultural import restraints coauthors are hugh m arce kenneth a reinert and joseph e flynn

resisting the protectionist temptation industry and the making of trade policy in france and the united states during the 1970s why were advanced industrial states able to keep their economies relatively open to foreign trade in the 1970s and the early 1980s despite declining u s hegemony and increasing economic difficulties this article argues that an international level change affected domestic trade politics and contributed to the maintenance of a liberal trading system examining the united states and france the argument proceeds in two steps showing first how domestic trade politics were changed and second how this change affected the policy process initially i argue that aspects of the increased international economic interdependence of the postwar period altered domestic trade politics by creating new anti protectionist preferences among certain firms firms with extensive international ties through exports multinational production and global intra firm trade have come to oppose protectionism since it is very costly for them evidence for these new preferences was apparent among both american and french industries despite different contexts firms in the two countries reacted similarly to the growth of interdependence next i ask whether firms preferences affected trade policy outcomes and show how these preferences were integrated into the policy process in both countries trade policy structures in neither country prevented firms preferences from affecting the policies adopted even in france a so called strong state firms preferences were a key influence on policy in the trade policy area then the french and american states did not appear to differ greatly in their susceptibility to industry influence even though their policy processes were different

industry specific effects of antidumping activities evidence from the us the european union and china this article analyses industry specific effects of antidumping ad activities on trade using the system generalized method of moments gmm in dynamic panel date models in the process of doing so this article selected three frequent ad users such as the us the european union eu and china additionally we chose the metal steel chemical and plastic rubber industries for the us cases chemical metal steel and machinery electronics industries for the eu cases and the chemical industry for the chinese cases based on the analyses conducted herein we detected positive evidence of industry specific impacts of ad measures imposed by the three frequent users

on the incidence of us tariffs this paper provides evidence on the incidence of tariffs on products of export interest to developing countries by investigating the relationship between per capita incomes of us trading partners and tariff rates it constitutes the first attempt to assess the incidence of tariffs imposed by the us on countries that span the entire range of per capita incomes average tariff rates are lower for the poorest and richest countries and higher for countries in the middle of the income distribution this finding is not consistent with the widely held view that tariffs used by industrial nations bear more heavily on products of export interest to poorer developing countries than on imports from industrial nations it is consistent with the tariff escalation pattern reported in earlier studies if advanced countries account for most products at the high end of the fabrication scale results show that poorest countries will find it difficult to escape tariffs by attaining higher levels of economic development

why understanding smoking bans is important for estimating their effects california s restaurant smoking bans and restaurant sales i introduction a voluminous literature has sought to quantify the effect of smoking bans typically on the quantity of smoking but also on the performance of affected businesses 1 various time periods have been explored types of bans considered locales examined and specifications employed nonetheless the majority of studies share two common failings first smoking bans of a given type e g a restaurant ban are treated as homogenous when in fact such bans have been enacted at various jurisdictional levels municipality county or state at various times in various orders and in various combinations with other types of smoking bans and with similar bans at other jurisdictional levels second empirical specifications do not adequately control for preexisting trends in the dependent variable as a result many studies arrive at fundamentally wrong conclusions we illustrate these points in an investigation of how california s restaurant smoking bans have affected restaurant sales we analyze the effect of smoking bans on restaurant sales for two reasons first the issue plays a role in the policy debate more than 150 studies many published in refereed journals and others in consulting reports undertaken for municipalities have explored whether smoking bans help or hinder restaurants scollo and lal 2005 yet few of these studies properly account for the effects of preexisting trends or changes in trends for the closely related question of ban endogeneity or for ban heterogeneity second restaurant sales data are very rich well measured available by municipality by quarter and over an extended period therefore we can identify effects that would be obscured by cruder data e g periodic survey responses enabling us to draw lessons applicable to studies of the effect of other types of smoking bans e g workplace bans in other dimensions e g smoking prevalence we investigate 267 california municipalities for which the california state board of equalization provides quarterly taxable restaurant sales 2 we begin by employing naive specifications which treat bans as homogenous and control simplistically for trends representative of those typically estimated in the literature the results of our naive specifications indicate that smoking bans have a large negative effect on restaurant revenues however when we examine municipal and state bans separately we find a positive association between municipal bans and restaurant sales and a negative association between the state ban and restaurant sales finally when we control properly for preexisting trends in the dependent variable we find no substantial evidence of any causal relationship running from either municipal bans or the state ban to restaurant sales thus we reach two main conclusions the first is that california s municipal restaurant smoking bans are endogenous in a critical way restaurant sales growth or something correlated with restaurant sales growth appears to cause restaurant bans not vice versa the second is that because communities are heterogenous one must analyze the effect of a ban taking into account the level at which the ban was enacted pooling data and treating smoking bans as homogenous as many studies do is inappropriate cities that impose bans on themselves are likely to differ systematically from those that have bans forced on them by a higher jurisdiction county or state relatedly analyzing and or instrumenting for smoking bans using state level data again as many studies do may fail to capture the relevant variation when the bans have force at a lower level of jurisdiction e g a municipal ban our analysis although focused on restaurant bans and sales has implications for the more extensive literature on how smoking bans influence smoking behavior most importantly it demonstrates the crucial nature of identifying and controlling for trends in the dependent variable whether restaurant revenue as in our data set or smoking rates

the public demand for smoking bans smoking bans are gaining widespread support in the united states and other countries while supporters argue that bans are necessary to resolve market failures associated with negative externalities the coase theorem predicts that under various conditions private markets internalize negative externalities we examine the smoking issue within the framework of the coase theorem and hypothesize that smoking bans misallocate air space resources shared by smokers and nonsmokers because smoking bans shift ownership of scarce resources they are also hypothesized to transfer income from one party smokers to another party nonsmokers supporting evidence for these hypotheses is provided by an examination of a comprehensive smoking ban imposed in san luis obispo ca

the effects of smoking laws on seating allocations of restaurants bars and taverns michael l marlow supporters of smoking laws often argue that they do not harm restaurants bars and taverns and may even raise their profits opponents argue that owners cater to customer preferences regarding smoking and that laws mandating specific smoking policies will therefore negatively impact profits of some firms this article tests hypotheses regarding how smoking laws affect seating allocations using data from a nationwide survey of restaurant and bar owners the empirical evidence indicates that smoking laws exert no significant effect on seating allocations firms are shown to allocate greater shares of seating to nonsmoking use when customers exhibit stronger preferences for such seating jel k2 h0 i introduction laws restricting smoking in restaurants have been enacted in 32 states supporters of these laws often argue that they do not harm firms and may even raise their profits 1 recent studies for instance argue that outright bans on smoking in eating and drinking places have not adversely affected these establishments suggesting that smoking bans either do not reduce demand or lower costs for firms which offsets sales losses thus leading to no adverse changes in profits opponents of smoking restrictions argue that owners cater to customer preferences regarding smoking some owners would find it profitable to allow smoking throughout their establishments others to forbid all smoking and still others to accommodate both smokers and nonsmokers by investing in partitions designating areas creating smoking patios or rooms and or investing in air filtration systems they argue that laws that mandate specific smoking policies will therefore negatively impact profits of some firms little economic research has been published on the effects of smoking laws on revenues of restaurants bars and taverns and none has been directed toward the issue of smoking nonsmoking seating allocations 2 this article provides a framework for examining how customer preferences influence smoking and nonsmoking seating allocations by owners the primary policy that firms unilaterally adopt in their attempts to deal with the issue hypotheses regarding how smoking laws affect seating allocations are then tested using data from a nationwide survey of 1 300 restaurant bar and tavern owners the empirical evidence indicates that smoking laws exert no significant effect on seating allocations ii economic model and testable hypotheses without legal restrictions policies adopted by restaurants bars and taverns toward smoking are determined in much the same manner as decisions regarding menus prices and hours of operation profit maximizing firms optimize on the basis of customer demand and costs decisions pertaining to smoking policies simply allocate the air space within firms between smoking and nonsmoking customers 3 the air space within an establishment is considered just like any other resource and owners decide to cater solely to smokers to nonsmokers or to both by providing patrons with rights to smoke while accommodating others through smoking nonsmoking areas and air filtration systems the choice depends on customer preferences and relative marginal costs 4 predictably market segmentation naturally evolves where firms cater more to smokers in markets dominated by smokers than in those markets dominated by nonsmokers there may also be broad differences between how owners of restaurants and bars or taverns allocate seating customers of restaurants are likely to prefer that owners adopt different accommodation strategies than would patrons of bars and taverns restaurant customers tend to dine in one location within firms and therefore it is possible for owners to designate sections for smokers and nonsmokers and this predictably leads to a relatively high allocation of nonsmoking seating in contrast customers of bars and taverns may prefer to participate in various activities dining drinking listening to music dancing and playing pool darts and billiards whereby they move to different locations within the establishment during their visit and interact with different patrons

antidumping decisions and macroeconomic variables in the usa this paper investigates the macroeconomic factors that explain antidumping decisions in the us international trade commission johansen s cointegration test results show that there is a long run equilibrium relationship between growth of the percentage of affirmative antidumping decisions and trade balance the error correction model shows that there is a causality running from the latter to the former growth of the percentage of affirmative antidumping decisions is revealed to cause slowdown in economic growth partisan characteristics are observed in the commissioners antidumping decisions

putting out fires an examination of the determinants of state clean indoor air laws 1 introductionfew products have generated as much public scrutiny as tobacco in light of the health consequences associated with smoking the federal government took several steps in the 1960s such as published health warnings and restrictions on cigarette advertising to reduce the incidence of smoking beginning in the 1970s state governments began to play an increasing role in the anti smoking campaign by adopting clean indoor air laws which restricted smoking in particular locations such as restaurants bars and work sites 1various studies including wasserman et al 1991 chaloupka 1992 chaloupka and saffer 1992 and yurekli and zhang 2000 generally confirmed that clean indoor air laws are effective at reducing cigarette demand however the nature of the smoking restriction appears to matter in particular chaloupka 1992 and chaloupka and saffer 1992 found that restrictions on smoking in public places reduced cigarette demand whereas restrictions at private work sites do not significantly reduce demand 2due to variations in antismoking laws across states only a few studies have addressed the demand for clean indoor air laws in a survey of individuals from san luis obispo california for example boyes and marlow 1996 found nonsmokers and women to be more supportive of a smoking ban in restaurants and bars alternatively chaloupka and saffer 1992 used state level data and found that differences in smoking restrictions in public places and at private work sites depend on several factors including cigarette prices income tobacco production religious affiliation and political activity more recently hersch del rossi and viscusi 2004 found that voting preferences of state residents and the political affiliation of lawmakers were the main factors that affect whether or not a restriction is adopted at a specific location for example restaurants bars malls enclosed arenas and hospitals however smoking habits could have an effect on voting preferences therefore these results could show the indirect effect of tobacco consumption on smoking restrictions there are several limitations of the existing literature that lead to a need for further analysis first studies have ignored the potential role of cigarette taxation as a determinant of smoking bans for example if states adopt a general antismoking position taxes could be used in conjunction with smoking bans to reduce tobacco consumption thus depending on the argument states may view taxation as a policy substitute or a policy complement to clean indoor air laws second the potential endogeneity of right hand side variables has not been addressed for example tobacco consumption is often included as a determinant of smoking bans however tobacco consumption may potentially be endogenous in general studies have found that restrictions on smoking in public places reduce cigarette demand which implies that cigarette consumption is potentially endogenous in the reverse regression of smoking on restrictions it is unfortunate that the literature has not addressed this possibility in a systematic manner 3 third except for hersch del rossi and viscusi 2004 studies have failed to account for differences in the demand for clean indoor air laws across different restricted locations this study addresses these limitations by estimating the demand for clean indoor air laws using a panel of state level data by using a panel data set we were able to control for state specific effects that made it more or less likely that a given state had a smoking ban in a particular area specifically we accounted for the potential endogeneity of cigarette consumption and taxation within a random effects probit model of the adoption of smoking restrictions across six locations public places government buildings private work sites schools health care facilities and restaurants

constituency interests and delegation in european and american trade policy trade policy in the eu and the united states is to a large extent delegated to executive agents existing explanations claim that legislators delegate because they wish to liberalize but are unable to achieve this on their own the authors show that legislators delegate powers to obtain foreign market access for exporters and protection for import competing interests confronted with heterogeneousdemands from both groups principals delegate to two sets of agents to confer concentrated benefits on these constituencies and install control to avoid concentrated losses while maintaining the flow of resources from lobbying the authors derive the empirically observable implication that with the increase in the share of tradables in the overall economy delegation as well as control should steadily increase with time they then test the validity of this proposition for u s trade policy since 1916 and for european trade policy since 1958

budget spillovers and fiscal policy interdependence evidence from the states abstract this paper formalizes and tests the notion that states expenditures depend on the spending of similarly situated states we find that even after allowing for fixed state effects year effects and common random shocks among neighbors a state government s level of per capita expenditure is positively and significantly affected by the expenditure levels of its neighbors ceteris paribus a one dollar increase in a state s neighbors expenditures increases its own expenditure by over 70 cents

import protection business cycles and exchange rates evidence from the great recession this research estimates the impact of macroeconomic fluctuations on import protection policies over 1988 q1 2010 q4 for five industrialized economies the united states european union australia canada and south korea there is evidence of a strong countercyclical trade policy response in the pre great recession period of 1988 q1 2008 q3 during which increases in domestic unemployment rates real appreciations in bilateral exchange rates and declines in the gdp growth rates of bilateral trading partners led to substantial increases in new temporary trade barriers it then applies this pre great recession empirical model to realized macroeconomic data from 2008 q4 2010 q4 and find it predicts a surge of new import protection during the great recession e g for the us and eu the model predicts new trade barriers would cover an additional 15 percentage points of nonoil imports well above the baseline level of 2 3 percent of import coverage immediately preceding the crisis finally the research examines why the realized trade policy response differed from model predictions while exchange rate movements played an important role in limiting new import protection during the great recession there is also evidence of one particularly important change in trade policy responsiveness i e in this period governments refrained from imposing new temporary trade barriers against foreign trading partners experiencing their own weak or negative economic growth

antidumping law as a collusive device in the united states many antidumping petitions are withdrawn before the investigations are completed prusa 1992 argues that petitions are used by domestic industries to induce foreign industries into collusive agreements in his model all antidumping petitions should be withdrawn which is not the case this paper provides a model in which only some petitions are withdrawn withdrawal depends on two key parameters coordination cost and bargaining power of domestic and foreign industries a new data set is constructed to test the model on the u s experience for the period 1980 97 the econometric analysis supports the theoretical conclusions of the model

eu anti dumping and tariff cuts trade policy substitution the world trading system in its current form aims at reducing multilateral trade barriers across the board indeed the last successfully concluded multilateral trade negotiations led to substantial tariff concessions on the part of most developed economies what however happened to other forms of import protection have substantial tariff concessions subsequently been replaced by the use of alternative forms of import protection in this paper we empirically investigate the relationship between negotiated external tariff cuts and the subsequent use of anti dumping actions by the eu evidence is found for larger uruguay round tariff cuts increasing the probability of subsequent anti dumping investigations

determinants of state tobacco control expenditures while centers for disease control and prevention believe that most state governments under fund tobacco control programs little is known about why large variation in spending exists between state governments this study explores reasons for spending variation through an econometric model of per capita spending on tobacco control programs that explores the effects of smoking prevalence while holding constant tobacco settlement funds state budget deficits and other factors that might also be expected to influence spending variation empirical evidence indicates no support for the hypothesis that states with high smoking prevalence spend more on tobacco control than other states this finding may be quite surprising to those working in areas of public health and clearly leads to many important policy questions regarding why the data indicate that funding does not appear to bear any relation to perceived public health problems as would be predicted if policymakers were following a rational needs approach

wto tariff commitments and temporary protection complements or substitutes abstract there is a long held notion in the trade policy literature that traditional tariff instruments and temporary protection tp measures are substitutes despite this prediction there is only mixed empirical evidence for a link between tariff reductions and the usage pattern of antidumping safeguard and countervailing duties based on recent theoretical advances i argue in this paper that the relevant trade policy margin for implementing tp measures is instead tariff overhangs the difference between wto bound and applied tariffs lower tariff overhangs constrain countries to raise their mfn applied rates without legal repercussions independent of past tariff changes using detailed sectoral data for a sample of 30 wto member countries during the period 1996 2014 i find strong evidence for an inverse link between tariff overhangs and tp activity this result implies that tariff overhangs and tp measures are substitutes vindicating the importance of existing tariff commitments as a key determinant of alternative protection instruments

efetividade do instrumento antidumping no brasil entre 1990 e 2007 the aim of this study was to evaluate the effectiveness of anti dumping instrument in brazil two aspects the relationship between antidumping filings and macroeconomic factors and the effects of macroeconomic variables and industry size on the likelihood of petitioner law enforcement antidumping the results showed that macroeconomic variables have no effect on the number of antidumping filings for the brazilian economy from 1990 to 2007 moreover result supports the hypothesis that adverse scenarios in the national economy and the specific characteristics of sectors petitioners for the increased probability of conclude by the application of antidumping law reducing its effectiveness

the politicisation of ec anti dumping policy member states their votes and the european commission this paper examines one political economy aspect of the european communities ec anti dumping policy that has tended to be overlooked in prior studies namely the role that member states play in deciding whether to impose definitive duties on imports that have been found to be dumped and that are deemed to have injured a european industry we find that in the late 1990s numerous disagreements between member states occurred over the merits of imposing anti dumping duties these disagreements may well have been partly responsible for the strong decline in the number of european anti dumping investigations initiated after 1999

the political economy of ec protectionism national protectionism based on article 115 treaty of rome this paper investigates the trade policy of the ec based on art 115 treaty of rome it is shown that politicians and bureaucrats take advantage of the significant discretion the procedure allows political and bureaucratic self interest are the underlying motives for national trade barriers against non member countries based on art 115 the empirical results support this hypothesis

do workplace smoking bans reduce smoking in recent years workplace smoking policies have become increasingly prevalent and restrictive using data from two large scale national surveys we investigate whether these policies reduce smoking our estimates suggest that workplace bans reduce smoking prevalence by 5 percentage points and daily consumption among smokers by 10 percent although workers with better health habits are more likely to work at firms with smoking bans estimates from systems of equations indicate that these results are not subject to an omitted variables bias the rapid increase in bans can explain all of the recent drop in smoking among workers relative to nonworkers

the political economy of administered protection trade restrictions are hardly ever voted directly by congress though the threat of direct congressional action is frequently present pressure for protection is usually applied through the major instruments for the administrative regulation of imports the antidumping and countervailing duty procedures and the escape clause mechanism in this paper we will examine these instruments for the administrative regulation of imports the form of the paper is not novel a theory of how these mechanisms work is developed then operational implications of this theory are deduced and tested over the record of countervailing duty antidumping and escape clause cases decided from 1975 through 1979 this is the period over which the trade act of 1974 was in force because the nature of these mechanisms is relatively unfamiliar a relatively large amount of institutional information is provided

the impact of off balance sheet activities on banks returns an application of the arch m to canadian data abstract this paper revisits the impact of off balance sheet obs activities on banks risk return trade off recent studies e g stiroh and rumble 2006 show that increasing obs activities does not necessarily yield straightforward diversification benefits for banks however introducing a risk premium in the standard banks returns models and resorting to an arch m procedure canadian data suggest that banks risk return trade off displays a structural break around 1997 in the second subperiod of our sample 1997 2007 we find that the noninterest income generated by obs activities no longer impacts banks returns negatively while during the first period 1988 1996 the volatility variable is not significant in any returns equations a risk premium eventually emerges pricing the risk associated to obs activities

disagreement as a measure of uncertainty this paper presents evidence from the livingston survey of inflation forecasts that forecaster disagreement provides a useful measure of forecast uncertainty the evidence is analogous to the evidence for arch effects disagreement at the time of the forecast has as large positive effect on the conditional variance of the subsequent forecast error as a conditioning variable forecaster disagreement dominates arch for both survey errors and the error terms in robert engle s quarterly model of inflation as measured by the resulting conditional variances disagreement indicates larger and more variable levels of uncertainty for the 1946 94 period copyright 1996 by ohio state university press

econometric issues in macroeconomic models with generated regressors the paper critically reviews the literature on the econometric issues raised by the use of generated regressors gr in empirical models the economic rationale for the use of gr is considered with examples being drawn from several macroeconomic examples including new classical macroeconomic ncm models which postulate monetary neutrality various estimation methods are discussed for models which include surprise or unexpected terms and the strengths and weaknesses of each approach are investigated drawing upon the work of mcaleer and mckenzie 1991 situations where the typically inefficient two step estimation 2se method will be efficient are highlighted problems of model misspecification and measurement errors are also investigated an empirical section highlights some of the dangers of using uncorrected 2se estimation results through a careful consideration of many recent attempts to test the ncm monetary neutrality hypothesis copyright 1993 by blackwell publishers ltd

macroeconomic uncertainty and banks lending decisions the case of italy this article discusses the role that macroeconomic uncertainty plays in banks decisions on the optimal asset allocation following the portfolio model proposed by baum et al 2005 the article aims at disentangling how italian banks choose between loans and risk free assets when uncertainty on macroeconomic conditions increases the econometric results confirm that macroeconomic uncertainty is a significant determinant of banks investment decisions also after controlling for other factors in periods of increasing turmoil banks ability to accurately forecast future returns is hindered and herding behaviour tends to emerge as witnessed by the reduction of the cross sectional variance of the share of loans held in portfolio

rules or politics an empirical analysis of itc anti dumping decisions this research analyzes the international trade commission s anti dumping decisions from 1980 to 1986 the results suggest that commissioners use criteria consistent with the instructions set forth in u s legislation the analysis also indicates that political variables help predict commissioner decisions petitions involving senate oversight committee members constituencies may be systematically favored in the process evidence of possible bias toward less developed country exports is presented as well the methodology also yields estimates of commissioner specific fixed effects

the congressional bureaucratic system a principal agent perspective with applications to the sec this paper provides the theoretical perspective and empirical support for congressional dominance of agency decisions my thesis is twofold first because much of the previous evidence on this question is not evidence at all many scholars intuition and conclusions are based on a logically flawed foundation second i have provided here and in previous work a look at a variety of different agencies and in each case have shown how the events can plausibly be interpreted as involving congress agency problems within the congressional bureaucratic system are real and substantial just as they are within corporations however as in the latter institutional forms develop within the congressional system to partially if not wholly mitigate these problems the logical perspective together with the evidence provide a strong case against the agency dominance hypothesis as typified by the early sections of niskanen 1971 and wilson 1980

bank systemic risk and macroeconomic shocks canadian and u s evidence abstract this paper investigates how banks as a group react to macroeconomic risk and uncertainty more specifically it examines the relationship between bank systemic risk and changes and disruptions in economic conditions adopting the methodology of beaudry et al 2001 we introduce a new estimation procedure based on egarch to refine the framework developed by baum et al 2002 baum et al 2004 baum et al 2009 and quagliariello 2007 quagliariello 2009 and we analyze the relationship in the current industry context i e in the context of market based banking our results confirm that banks tend to behave more homogeneously vis a vis macroeconomic uncertainty in particular we find that both the cross sectional dispersion of loans to assets and the cross sectional dispersion of non interest income share shrink during slow growth episodes and particularly during financial crises when the resilience of the banking system is at its lowest more importantly our main findings indicate that the cross sectional dispersion of loans to assets has increased in the last decade whereas the cross sectional dispersion of non interest income share appears to be more volatile and sensitive to macroeconomic shocks

the econometric analysis of models with risk terms summary in this paper we have attempted to provide an integrated approach to the estimation of models with risk terms it was argued that there exist orthogonality conditions between variables in the information set and higher order moments of the unanticipated variable density these could be exploited to provide consistent estimators of the parameters associated with the risk term specifically it was recommended that an iv estimator should be applied with instruments constructed from the information set four existing methods commonly used to estimate models with risk terms are examined and applications of the techniques are made to the estimation of the risk term in the us c exchange market and the effects of price uncertainty upon production

endogenous protection foreign direct investment and protection building trade abstract we introduce the possibility of foreign direct investment fdi in a strategic oligopolistic setting with endogenous protection and find that a number of unique subgame perfect equilibria may arise including a new result we call protection building trade this phenomenon occurs in our model when foreign firms locating production in the home country try to increase protectionist pressures in the home country through increased exports to provide larger barriers against other foreign competitors in future periods we discuss how the foreign firm behavior surrounding significant u s protectionist actions including the vers on japanese automobiles may be consistent with protection building trade behavior

cumulation and itc decision making the sum of the parts is greater than the whole in 1984 congress amended the antidumping and countervailing duty laws man dating that the international trade commission itc cumulate imports across countries when determining injury we estimate that cumulation increases the probability of an affirmative injury determination by 20 to 30 percent and has changed the itc s decision from negative to affirmative for about one third of cumulated cases we also show that the protective effect of cumulation increases as the number of countries involved increases holding import market share constant that is cumulated imports have a super additive effect on itc decision making

evolving discretionary practices of u s antidumping activity using data on u s dumping margin calculations by the u s department of commerce usdoc we first document the rapid rise in u s dumping margins from around 15 in the early 1980s to over 60 by 2000 second statistical analysis finds that usdoc discretionary practices have played the major role in rising u s dumping margins over this period importantly the evolving effect of discretionary practices is due not only to increasing use of these practices over time but to apparent changes in implementation of these practices that mean a higher increase in the dumping margin whenever they are applied utilisant des donnees sur le calcul de l ecart entre les prix aux etats unis et les prix de ces biens dans leur marche national d origine dumping margin calcules par le u s department of commerce usdoc on montre que ces marges sont passees d environ 15 au debut des annees 80 a plus de 60 en l an 2000 une analyse statistique suggere que les pratiques discretionnaires du usdoc ont joue un role important dans l accroissement de ces marges au cours de la periode cela n est pas attribuable seulement a l accroissement de ces pratiques dans le temps mais aux changements apparents dans la mise en application de ces pratiques qui se sont traduits par un accroissement de la marge quand on choisit de l appliquer

is the median voter a clear cut winner comparing themedian voter theory and competing theories in explaining localgovernment spending this paper attempts to test the power of the median model againstthe respective strength of other alternate models based onredistributive political institutional and interest group theoriesin explaining the demand for public spending in new york statecounties during 1990 1980 and 1970 to execute the comparison ofthe performance of median voter model with that of each of thenonmedian voter ones various nonnested tests such as j and jatests n tilde w and encompassing tests have been employed results of the study show that although the median voter model hasa marginal edge over the rival models based on the alternativetheories it may not be relied upon solely when many otherinstitutional redistributive and interest group factors are alsorelevant for explaining public spending the results of this studydiffer from those in congleton and bennett 1995 we do not findthat interest group models are substantially weaker than the medianvoter model

china s export growth and the china safeguard threats to the world trading system is there evidence from china s pre wto accession period that newly imposed u s or eu import restrictions deflect chinese exports to third markets the authors examine this question by drawing on a newly constructed data set of u s and eu product level import restrictions on chinese trade imposed between 1992 and 2001 and estimate their impact on chinese exports to 38 alternative markets there is no systematic evidence that the import restrictions imposed during this period resulted in chinese exports surging to such alternate destinations to the contrary there is weak evidence of a chilling effect on china s exports to third markets

antidumping and countervailing duty decisions in the e c and in the u s an experiment in comparative political economy abstract in recent years there has been a growing concern about the recourse to antidumping measures by the gatt member countries such measures can become a substitute for selective protection in the present article the dumping and injury determinations of the e c are subjected to econometric analysis using the finger hall nelson fhn model which makes a distinction between the political determinants and the technical determinants the results show that the technical variables dominate the dumping decisions while the political variables are more important in the injury determinations of the e c a comparison with the results obtained by the fhn study confirm the broad similarity between the e c and the u s patterns although the e c injury decisions are somewhat more susceptible to the influence of political variables the results of the study suggest that those who are interested in restraining the misuse of the antidumping provisions should concentrate their attention on the injury determination mechanism

industry rent seeking and the filing of unfair trade complaints abstract this paper adopts a rent seeking framework to explain the incidence of antidumping and countervailing duty complaints brought to the u s international trade commission and the department of commerce tobit analysis on all 3 digit sic industries is employed to examine the relationship between the frequency of unfair trade complaints and such factors as industry concentration unionization capital intensity and levels and or changes in employment price cost margins and import penetration large capital intensive industries particularly those facing employment losses and rising import shares are found to be most likely to file complaints protection of quasi rents accruing to capital and labor rather than protection of monopoly returns appears to be the primary impetus behind the filing of unfair trade complaints

increased protection in the 1980s exchange rates and institutions the strong appreciation of the u s dollar between 1980 and 1985 encouraged the substitution of imports for domestically produced goods for a variety of products this in turn increased the demand for trade protection many of these demands were satisfied via apolitical u s antidumping and countervail regulations yieldingad valorem tariffs well above current average statutory duties the supply of trade protection is developed via a principal agent model that describes the potential gains to both the regulatory agency and the legislator empirical results support the model specification finding both exchange rate and political cycles in the use of apolitical trade protection

voting for protection an electoral model of tariff policy politicians want to please their constituents and will attempt to manipulate trade policy to further this goal this article elaborates a model of the electoral incidence across congressional districts of the interindustry structure of tariff protection with an application to the mckinley tariff of 1890 it may contribute to a neglected area of research on the domestic politics of tariffs to the history of a period of tariff formation in which there has been little recent work and to the debate over legislative representation of constituency interests models of the domestic political market for trade policy endogenous tariff theory can be divided into four categories with classification based on whether they are formal or empirical and on whether they focus on the demand or the supply side of the political market many of the formal models are too abstract to produce readily testable propositions 1 wolfgang mayer s model for example assumes that tariffs are set by a national popular referendum and deduces tariff structures from median voter results 2 there is no government in this type of model the demanders and suppliers of policy are the same william brock and stephen magee s model assumes a singleissue election in which politicians bid for votes by offering tariff protection up to the point at which marginal gains votes plus campaign contributions equal marginal costs lost votes plus lost contributions 3

an analysis of factors influencing the anti dumping behaviour in india the use of anti dumping measures as a trade protection tool has increased phenomenally during the last decade one significant aspect of this new trend is the increasing involvement of developing countries india is one such country which has emerged as a very frequent user of anti dumping measures surpassing even the traditional users it had initiated more than 300 anti dumping cases by the end of 2002 03 many of these cases are against developing countries most of the cases are concentrated in narrow range product groups like chemicals and petrochemicals iron and steel pharmaceuticals and textiles this study examines india s experience with anti dumping measures the main objective of the study is to identify the factors which might have influenced the anti dumping behaviour in india discussion of these factors shows that imports have increased considerably this is particularly true for a number of developing countries facing dumping charges in india at the same time many of the domestic producers of the like products have performed poorly during the last decade such trends may instigate the import competing industries to seek anti dumping protection and may also influence the authority to provide that however the results of our statistical exercise show that although imports and performance of the domestic industry might have influenced the initiation of anti dumping cases these factors did not seem to significantly influence the final decision of the authority the results rather indicated a tendency on the part of the authority to provide anti dumping protection to industries which are characterised by a large number of firms

lobbying under political uncertainty abstract this paper considers a model of lobbying described as a common agency game it departs from the current literature by assuming that the special interest groups are not a priori organized or unorganized and that the type of the politician is not common knowledge we characterize equilibria when the choice set of the politician consists of two policies we discuss the conditions leading to efficiency and the characteristics of the groups explaining their relative success in the process of influence we also offer some results for the general case including disjoint necessary and sufficient conditions for the equilibria to be efficient

the political economy of anti dumping undertakings in the european communities abstract logit regression analysis is used to test the validity of hypothesized determinants of the european communities choice between the acceptance of undertakings and the imposition of definitive duties in terminating antidumping cases the results of the study confirm that certain variables based on the theory of the political economy of trade policy supplemented by those suggested by knowledgeable practitioners go a long way in explaining such choice the findings and the approach used have important practical implications particularly for the defendants and the lawyers involved in antidumping cases

production effects of price and cost based anti dumping laws under flexible exchange rates this paper investigates the production response of an exporting firm when faced with the threat of an anti dumping ad action the firm s production decision is sensitive to market conditions at home and abroad as well as to the definition of dumping we examine the incentives facing the exporting firm under price based marginal cost based and average total cost based anti dumping laws depending on the nature of the anti dumping rules and market conditions a firm s production may rise fall or remain unchanged in response to ad legislation les effets de production des lois anti dumping fondees sur les prix et sur les couts dans un

antidumping and retaliation threats abstract we propose and test two ways in which retaliation threats may dampen the antidumping ad activity we observe first the threat of retaliatory ad actions may make a domestic industry less likely to name a foreign import source in an ad petition second the prospect of a gatt wto trade dispute may make government agencies less likely to rule positive in their ad decision using a nested logit framework we find evidence that both retaliation threats substantially affect us ad activity from 1980 through 1998

a theory of competition among pressure groups for political influence this paper presents a theory of competition among pressure groups for political influence political equilibrium depends on the efficiency of each group in producing pressure the effect of additional pressure on their influence the number of persons in different groups and the deadweight cost of taxes and subsidies an increase in deadweight costs discourages pressure by subsidized groups and encourages pressure by taxpayers this analysis unifies the view that governments correct market failures with the view that they favor the politically powerful both are produced by the competition for political favors

from senators to the president solve the lumber problem or else we use key events associated in the two decade long u s canada softwood lumber trade dispute to present the dynamic relationship between u s congress and the administration in the formation of international trade policy we find that the executive branch of the u s government responded quickly to several letters from a group of u s senators demanding a solution to the lumber problem a roll call analysis is used to identify factors influencing senators willingness to sign these letters and pressure the president on behalf of the u s lumber industry the results show that the economic importance of the lumber industry in a senator s home state is positively correlated with signatory on these letters and that the presence of a large housing industry in a state makes a senator less likely to sign these letters

habitual and occasional lobbyers in the u s steel industry an em algorithm pooling approach bernard yeung using u s steel firm data we find that lobbying for import protection appears to be habit forming to identify heterogeneity in lobbying behavior among firms we use an expectation maximization algorithm to sort our firms into groups with different propensities to lobby and estimate the determinants of lobbying in each group a two pool model emerges occasional lobbyers lobbying depends on their market performance and habitual lobbyers lobbying only depends on past lobbying the latter tends to be larger steel firms whose business is more focused in steel our evidence is consistent with dynamic economies of scale in protection seeking breeding protection dependent firms jel f13 1 introduction rent seeking activities plausibly have dynamic economies to scale past rent seeking experience should reduce the cost of further rent seeking and increase its return thus rent seekers may over time become more prone to further rent seeking and even become dependent on it given the large welfare losses theoretically associated with rent seeking e g bhagwati 1982 1988 and magee et al 1989 a better understanding of actual rent seeking behavior is required in particular empirical verification of the self sustaining nature of rent seeking is of fundamental importance lobbying for protection from import competition is a form of rent seeking this article uses data on lobbying for protection by firms in the steel industry in the 1970s and 1980s to show that a habit forming effect does exist in a preliminary investigation we pool all firm level data and find that past lobbying increases the current tendency to lobby however not all firms have the same propensity to lobby to allow heterogeneity among firms dependence on past lobbying we apply an expectation maximization em algorithm approach dempster et al 1977 to a lagged dummy model heckman 1982a 1982b this lets our firms sort themselves into groups according to the determinants of their lobbying activity our statistical results suggest that an acceptable division of our data is a division into two groups occasional lobbyers whose lobbying depends on the firm s market performance and habitual lobbyers whose lobbying is essentially unrelated to the firm s business situation and depends mainly on past lobbying firms that never lobby for protection end up in the first group greater firm size and greater focus in steel production are associated with increased lobbying in both groups but the influence is stronger for occasional lobbyers past sales growth and spending on modern equipment are associated with curtailed lobbying by occasional rent seekers but are unrelated to lobbying by habitual rent seekers changes in cash flow have no influence in either generally habitual lobbyers are larger firms whose business is more concentrated on steel they are naturally more inclined than occasional lobbyers to initiate lobbying however their lobbying appears to have become a habit divorced from their market pe rformance these results are consistent with the presence of economies of scale in rent seeking and with rent seeking being habit forming e g magee et al 1989 in the next section we describe the intensive lobbying for protection in the u s steel industry in the 1970s and 1980s we justify our contentions that lobbying for protection by steel firms in the sample period may be habit forming and that different groups of firms should have dissimilar propensities to lobby for protection in section iii we explain the em algorithm approach we explain the data in the fourth section and report our results in section v section vi concludes ii habitual and occasional lobbying in the u s steel industry in the united states domestic firms under import competition pressure often complain to the government about unfair foreign practice

vertical externalities in tax setting evidence from gasoline and cigarettes abstract a common feature of federal systems is that tax bases are joint property consequently state and federal tax setting decisions are interdependent our aim here is to put forward a rudimentary theoretical analysis of this phenomenon and to use the theory as a framework for econometrically estimating the magnitude of the responses we find that when the federal government increases taxes there is a significant positive response of state taxes for example a 10 cent per gallon increase in the federal tax rate on gasoline leads to a 3 2 cent increase in the state tax rate

the effects of real and nominal uncertainty on inflation and output growth some garch m evidence in this paper we use garch m methods to test four hypotheses about the effects of real and nominal uncertainty on average inflation and output growth in the united states from 1948 to 1996 we find no evidence that higher inflation uncertainty or higher output growth uncertainty raises the average inflation rate we also find no support for the idea that more risky output growth is associated with a higher average real growth rate our key result is that in a variety of models and sample periods inflation uncertainty significantly lowers real output growth copyright 2000 john wiley sons ltd

consensus and uncertainty in economic prediction we define consensus as the degree of agreement among point predictions aimed at the same target by different individuals and uncertainty as the diffuseness of the corresponding probability distributions this distinction is made operational with the aid of the nber asa survey data on matched point and probabilistic forecasts of inflation and the rate of change in gross national product the means of the two sets of forecasts agree closely standard deviations of point forecasts tend to understate uncertainty as measured by standard deviations of the predictive probability distributions however these measures of consensus and uncertainty are on the whole positively correlated there is evidence that expectations of higher inflation generate greater uncertainty about inflation tests also favor the hypothesis that a rise in inflation uncertainty has adverse effects on real growth

monetary instability the predictability of prices and the allocation of investment an empirical investigation using u k panel data it is often argued that monetary instability reduces the informational content of market signals and thereby hinders the efficient allocation of investment in this paper we use a signal extraction framework to give empirical content to this idea in particular we show why this framework predicts that as monetary uncertainty decreases the cross sectional distribution of investment widens we then explore this hypothesis using panel data information for uk companies over twenty years our data generally support the view that monetary instability may affect investment allocation through its effect on the predictability of prices this abstract was borrowed from another version of this item

the relationship between net interest margin and noninterest income using a system estimation approach abstract this paper examines the determinants of bank net interest margin nim and non traditional banking activities nii a system estimation approach is employed to control for the simultaneity between nim and nii for commercial banks in a group of 28 financially liberalized countries during the period between 1997 and 2004 we find a statistically significant negative relationship between nim and nii for the period between 1997 and 2002 a generally positive but statistically insignificant association between nim and nii is found for the subsequent period 2003 2004 banks increasing involvement in non traditional activities is negatively correlated with risk adjusted profitability measures in the former subperiod suggesting no obvious diversification benefits however the share of noninterest income is positively related to the return on assets roa and the return on equity roe for the latter subsample

the rise of us anti dumping activity in historical perspective empirical studies of anti dumping activity focus almost exclusively on the period since 1980 this paper puts recent us anti dumping experience in historical context by studying the determinants of annual case filings over the past half century the conventional view that few anti dumping cases existed prior to 1980 is not correct although most did not result in the imposition of duties the increased number of cases in recent decades largely reflects petitions that target multiple source countries the number of imported products involved has actually fallen since the mid 1980s the annual number of anti dumping cases is influenced by the unemployment rate the exchange rate import penetration closely related to the decline in average tariffs and changes in the anti dumping law and its enforcement in the early 1980s

the value of administered protection a capital market approach the focus of this paper i s on the escape clause petitions filed under the trade act of 1974 section 201 first the capital marketevent study method is used to analyze the effects of protection decisions then cross section regressions are performed to examine the influence of key variables on the observed market reaction the authors conc lude that while protection is beneficial to beleaguered industries the extent o f such benefits is quite narrowly circumscribed and is conditional on internal v ariables for each firm protection is thus not the panacea that its advocates cl aim copyright 1986 by mit press

a political economic model of u s bilateral trade a bstract interrelationships between economics and politics have long been recognized by scholars in the field of international relations this paper attempts to identify and quantify the factors aflecting bilateral trade flows between the united states and other countries by developing a gravity type model the model includes economic and political variables and is tested using data for sixty six u s trading partners results indicate that pure economic variables which reflect market forces are not the only factors affecting u s bilateral trade semi cconomic and international political factors are also important

anti dumping protection in a liberalising country mexico s anti dumping policy and practice the use of anti dumping policy has been steadily growing in recent decades and so has the theoretical and empirical literature on anti dumping however while developing countries as a whole have become at least as active as the traditional anti dumping regimes the usa the eu canada and australia the literature is almost exclusively concerned with the latter group this article gives an overview of anti dumping policy and practice in mexico one of the leading new anti dumping regimes it assesses how anti dumping has expanded since the country began liberalising trade in the mid 1980s and discusses how the policy has been applied in a protectionist way that is not dissimilar to policy practice in the traditional user countries

what do we know about investment under uncertainty recent theoretical developments relating to investment under uncertainty have highlighted the importance of irreversibility for the timing of investment expenditures and their expected returns this has subsequently stimulated a growing empirical literature which examines uncertainty and threshold effects on investment behaviour this paper presents a review of this literature a variety of methods have been used to investigate the empirical implication of irreversibility in investment the majority focusing on the relationship between investment flows and proxy measures of uncertainty a general conclusion is that increased uncertainty at both aggregate and disaggregate levels leads to lower investment rates this suggests that there is an irreversibility effect under which greater uncertainty raises the value of the call option to delay a commitment to investment this effect appears to dominate any positive impact on investment arising from the fact that greater uncertability under certain circumstances increases the marginal profitability of capital the methods used raise a number of issues which call into question the reliability of the findings and these are addressed in the paper however if such irreversibility effects are present then their omission from traditional investment models casts doubt on the efficacy of such specifications jel classification d81 d92 e22

do safeguard tariffs and antidumping duties open or close technology gaps abstract this paper examines how the country breadth of tariff protection can affect the technology adoption decisions of both domestic import competing and foreign exporting firms the contribution of the analysis is to show how firm level technology adoption changes under tariffs of different country breadth i show that a country specific tariff like an antidumping duty induces both domestic import competing firms and foreign exporting firms to adopt a new technology earlier than they would under free trade in contrast a broadly applied tariff like a safeguard can accelerate technology adoption by a domestic import competing firm but will slow down technology adoption by foreign exporting firms because safeguard tariffs can delay the foreign firm s adoption of new technology the worldwide welfare costs associated with using them may be larger than is generally believed

on the political economy of state highway expenditures some evidence of the relative performance of alternative public choice models this paper explores the extent to which the public demand for roads and or power of special interest groups determines road expenditures at the state level using an extension of the methodology developed in congleton and shughart 1990 reduced form models of median voter demand special interest group equilibria and a combined model are estimated using cross sectional state data from the united states we generally find support for the hypothesis that voting matters the pure median voter models have a better fit than the pure special interest group models moreover in our combined model we find that variables from the median voter model can not be dropped without significantly reducing the combined model s fit

effects of u s trade remedy law enforcement under uncertainty the case of steel this paper investigates the impact of u s trade remedy law enforcement on import penetration of foreign manufactured steel into the u s steel market given the quasi judicial process for implementation of the two provisions relevant to u s steel imports section 701 countervailing duty and section 731 antidumping duty i derive the probability augmented model to be used as the theoretical basis for the research the results obtained in this paper indicate that the trade remedy policy was effective however the elasticity measured degree of effectiveness was small