Black Hole Tariffs and Endogenous Policy Theory: Political Economy in General Equilibrium [Hardcover]

This book provides a special interest theory of protection.An example of special interest protection is provided by this study's general equilibrium theory that explains income distribution with goods markets, factor markets, lobbies, political parties and voters all pursuing their self interests.An example of special interest protection is provided by this study's general equilibrium theory that explains income distribution with goods markets, factor markets, lobbies, political parties and voters all pursuing their self interests.This book provides a special interest theory of protection, developing a full general equilibrium theory that explains the distribution of income with goods markets, factor markets, lobbies, political parties, and voters all pursuing their self interest. This probabilistic voting model shows how well-organized groups can use seemingly irrational government policies to exploit poorly organized groups. Given rational predatory behavior between these groups, protection or any other redistributive policy that improves the chances of election of a party increases political efficiency. This can create an economic black hole, conditions under which an entire economy can disappear into lobbying. Paradoxically, the tariff rates accompanying an economic black hole are very low. The economic waste is confined to lobbying costs. The book contains both theoretical and empirical work explaining protection in the United States (1900-1988) and levels of protection in about sixty foreign countries in the 1980s.Preface; Acknowledgments; list of results; 1. A preview of the results; 2. Endogenous policy theory: a diagrammatic approach; Part I. Endogenous Policy Theory with Specific Factors: The Theory of Industry Tariffs in Partial Equilibrium: 3. The probabilistic voting model of political efficiency and powerless politicians; 4. Endogenous lobbying theory and the contribution specialization theorem; 5. Endogenous tariff theory; 6. The power function ml/