Lobby interaction and trade policy

Abstract

The paper introduces interaction between organized lobbies in the protection-forsale framework. Special interest groups provide unconditional contributions such that the marginal contribution of a lobby is decreasing in the total sum collected by the government. In contrast to the protection-for-salemodel, not only the proportion of the population that owns capital in the organized sectors, but also the number of lobbies, matters for trade policy. It is also shown that an increase in the number of lobbies has a nonmonotone effect on each lobby’s contribution.