Abstract: Trade policy is the prototypical case of lobbying influence. Despite evidence to the contrary, most analyses of lobbying on trade assume a quid pro quo model of influence. We examine the implications of the legislative subsidy theory of lobbying for trade policy. We develop a model in which lobbying increases the weight legislators receive in the policymaking process. Industries seeking protection lobby legislators whose districts contain greater industry employment. Consequently, legislators whose districts contain large industries prone to lobby exert more influence on policy. In equilibrium, industries that co-locate with other large and lobbying-prone industries receive higher tariffs. We test these predictions using data on US trade policy from 1989 to 2016, exploiting redistricting-induced shocks to industry co-location. Within-district spillover effects help explain why existing studies estimate small effects of lobbying on trade policy. Lobbying advantages not only large and organized industries, but also weaker industries that share their locations.
Moderator: Bobby Gulotty