Electoral systems and international trade policy

TL;DR

This paper presents a theoretical model showing how electoral systems influence trade policy decisions, with proportional systems tending to be more protectionist and attracting higher lobbying efforts compared to majoritarian systems.

Contribution

It introduces a game-theoretic framework linking electoral systems, international pressure, and lobbying to trade policy outcomes, highlighting differences between proportional and majoritarian systems.

Findings

Proportional systems lead to more protectionist trade policies.

International pressure and foreign lobbying influence trade policy decisions.

Lobbies pay more in proportional representation systems to sway trade policies.

Abstract

We develop a simple theoretic game a model to analyze the relationship between electoral sys tems and governments' choice in trade policies. We show that existence of international pressure or foreign lobby changes a government's final decision on trade policy, and trade policy in countries with proportional electoral system is more protectionist than in countries with majoritarian electoral system. Moreover, lobbies pay more to affect the trade policy outcomes in countries with proportional representation systems.