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The Effects of the Electoral Regime on Trade Policy

Apr 2003
Working Paper
03-020
By  John Hatfield, William Hauk
This paper studies how tariffs will vary with the mechanism used to elect that country’s legislature. In particular, we study tariff policy under legislatures elected by a majoritarian election rule in single member constituencies and under a proportional, or party-list, rule. We develop a theoretical model in which office-seeking politicians’ decisions regarding tariffs are determined by their electoral institution. We find that proportional systems have higher average tariffs than majoritarian systems, and that under both systems, sectors with higher levels of employment will recieve higher tariffs, but that the effect will be more pronounced under a proportional electoral rule. Finally, we test this model empirically, and find that these predictions are borne out by the data.