Firms, Reciprocity, and Domestic Institutions

What is it about?

Standard political science theories of trade politics suggest conflict over trade policy across sector or class lines. Building on the literature on firm heterogeneity in international trade, this paper makes two contributions. First, conflict over trade policy fragments industry or class coalitions and breaks down to individual firms. Second, the competing demands over trade policy break the link between domestic institutions and trade openness. Domestic institutions cannot explain differences in average levels of trade openness based on differences in interest group influence. Instead, the influence of interest groups and firms is manifest in a higher dispersion of tariff rates across products.

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