The Korean Economic Review
Legislative Bargaining over Trade Policy
Ilseok Yang (Sungkyunkwan University)Year 2010Vol. 26No. 1
This paper analyzes trade policy formation in which three politicians with different preferences bargain over trade policy in a small open economy which has a fixed factor of production. I examine three cases which depend on the share of the factor of production and exogenous parameters in closedruleone-round bargaining. Unlike the previous models in the public choice literature, this model illustrates that the preferences of the centrist party may not be strategically important. As a result, this party may not be a part of the coalition and it is possible that the extreme parties form a coalition.