The Political Economy of the US Trade Liberalization
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Kebede, Hundanol Atnafu1, Forfatter
Dreyer Lassen, David 2, Vejleder
1Det Samfundsvidenskabelige Fakultet, Københavns Universitet, København, Danmark, diskurs:7001              
2Økonomisk Institut, Det Samfundsvidenskabelige Fakultet, Københavns Universitet, København, Danmark, diskurs:7014              
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Ukontrollerede emneord: political economy, voter reaction, political accountability, trade liberalization, endogeneity, free-trade bills
 Abstract: Theoretical models of the political economy of trade policy predict that trade liberalization is driven by the political influences of the capitalists through their monetary contributions to the political campaigns of politicians, and the economic interests of the electorate. The latter is based on untested assumption that voters can hold their representatives accountable by conditioning their voting decision on the observed policy choices of their representatives. The purpose of this thesis is to examine the empirical content of these theoretical predictions, and the validity of their underlying assumption. Using data for congressional voting on six highly controversial trade liberalization bills, a number of robust results are obtained. First, party platform, presidential regime, contributions by protectionist and free-trade lobbies, and personal ideological views of the legislators are found to be the key determinants of the positions taken by the legislators on trade bills. The constituents’ economic interests and adverse employment effects of NAFTA have also influenced the legislators’ voting behavior. The study also finds that the salience of trade policy, i.e., the extent to which voters base their voting decision on the observed trade policy choice of their representative, was very low during the time of NAFTA but increased markedly over a decade. The position taken by a representative on NAFTA and GATT had no effect on the election performance of representatives on the 1994 mid-term election, while legislators who supported CAFTA have experienced a moderate decrease in their vote-share (compared to those who voted against CAFTA) on the 2006 mid-term election. These results are robust to different sensitivity checks and estimation techniques.
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Bogmærk denne post:
 Type: Speciale
Alternativ titel: Congressional Voting on Free Trade Bills and Voter Reaction
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Sprog: English - eng
 Datoer: 2013-04-12
 Sider: -
 Publiceringsinfo: København : Københavns Universitet
 Indholdsfortegnelse: Part One- The Determinants of Legislators’ Votes on Trade Liberalization Bills
1.1 Approaches to Modeling the Political Economy of Trade Policy . 4
1.2 Empirical Approaches to the Determinants of Equilibrium Trade Policy . 9
1.3 A Simple Theoretical Framework 12
1.4 Empirical Methodology . 21
1.5 Data . 26
1. 6 Estimation, Results and Discussion 30
Part Two- Voter reaction to Legislators' Trade Position
2.1 Introduction 50
2. 2 Methodology: Econometric model, Data and Estimation . 52
2.3 Results and Discussion 55
2.4 Instrumental Variable Estimation 58
Conclusions 62
Bibliography 63
Appendices . 66
List of Tables
Table 1: Control Function Approach (Parsimonious Specification) 32
Table 2: Control Function Approach (Extended specification) . 34
Table 3: Full Information Maximum Likelihood (FIML) estimation 36
Table 4: Full Information Maximum Likelihood (FIML) estimation (lagged vote excluded) 38
Table 5: FIML and CF estimation result for Democrat Representatives . 40
Table 6: FIML and CF estimation result for Republican Representatives 41
Table7: Presidential Regime and Representatives’ voting behavior –DID estimates . 44
Table 8: The effect of presidential regime: Counterfactual simulations 46
Table 9: The effects of PAC contributions: counterfactual simulations . 48
Table 10: Non-parametric estimation result for Pooled observations . 56
Table 11: Non-parametric estimations for each bill separately . 57
Table 12: IV estimations for CAFTA (controlling for party-affiliation) . 60
Table 13: IV estimation for CAFTA-extended set of control variables 61
Appendix 1: Descriptive Statistics of variables used in Part 1 . 66
Appendix 2: Descriptive statistics and sources of variables used in Part Two 67
Appendix 3: Reduced form Estimation Results for PAC contributions . 68
Appendix 4: FIML , Random effects, and Pooled probit results (full observations) . 69
Appendix 5: FIML estimation for Democrats and Republicans (full observations) . 71
Appendix 6: The effect of presidential regime: disaggregated estimation 72
 Note: -
 Type: Speciale
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