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“Protection for Sale” in a Developing Country: Democracy vs. Dictatorship

Devashish Mitra1; Dimitrios D. Thomakos2; Mehmet Ulubaşoğlu3

1 Syracuse University and NBER, Australia · 2 Florida International University · 3 Deakin University

The Review of Economics and Statistics 2002

For a “genuine” small open economy that has experienced both dictatorship and democracy, we find support for the predictions of the Grossman-Helpman (1994) “Protection for Sale” model. In contrast to previous studies, we use various protection measures (including tariffs, the direct measure of the theoretical model) and perform both single-year and panel regressions. Using Turkish industry-level data, the government's weight on welfare is estimated to be much larger than that on contributions. More importantly, we find that this weight is generally higher for the democratic regime than for dictatorship.

DOI
10.1162/003465302320259493
Volume
84 (3)
Pages
497-508
Language
en
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