Strategic lobbying and taxation choice : a political economy of trade policy analysis

Doctoral thesis English OPEN
Tien, Hung-Hua
  • Subject: HJ | JA | HB

In this thesis, I use a political economy of trade policy approach to analyze\ud the issues of strategic lobbying and taxation choice. The thesis contains 4\ud papers together with an introduction, literature review and conclusion.\ud In Chapter 3, a lobbying-influence model is presented to discuss how the\ud outcomes of trade policy is influenced by lobbying activities during the policymaking\ud process. A comparison of the welfare-maximizing model and the\ud lobbying-influence model under a game theory framework is undertaken.\ud Chapter 4 provides a new explanation on the issue of asymmetric lobbying\ud from the view point of the impact of external environment. Since the incentive\ud of the domestic firm to engage in lobbying activities varies with its marginal\ud costs, the outcomes of lobbying performance are different. This argument holds\ud for both complete and incomplete information settings.\ud Chapter 5 considers whether there is a positive role for lobbying activities\ud in an incomplete information setting when the foreign entry is incorporated.\ud The results suggest that the social welfare under the pooling equilibrium is\ud higher than that under the separating equilibrium. As a result, there is no\ud positive role for lobbying activities in this two-period model.\ud Chapter 6 provides a political economy model to explain why trade taxes\ud rather than more efficient income taxes might be adopted and what links the\ud taxation choice and the economic development. In general, people prefers to\ud pay less tax to the government. In a democratic society, a policy, which yields\ud a higher utility to the majority of voters, is supported through majority voting.\ud Therefore, the choice of taxation instruments depends on the tax payments,\ud which are determined by the tax method, the income level, and the movement\ud of income distribution over time.\ud
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    17 references, page 1 of 2

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    Hillman, A.L., 1982," Declining industries and political-support protectionist motives," American Economic Review 72, 1180-1187.

    Ireland, N., 1995, "Information asymmetries and product regulation," in Bishop, Mattew; Kay,John and Mayer,Colin ed. The Regulatory Challenge, Oxford University Press, 191-207.

    Ireland, N., 1994, "On limiting the market for status signals," Journal of Public Economics 53, 91-110.

    Ireland, N., 1993, "The provision of information in a Bertrand oligopoly," Journal of Industrial Economics 41, 61-76.

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