Foreign Influence and Welfare ∗

  title={Foreign Influence and Welfare ∗},
  author={Pol Antr{\`a}s},
  • Pol Antràs
  • Published 2008
How do foreign interests influence the policy determination process? How is trade policy affected? What are the welfare implications of such foreign influence? In this paper we develop a model of foreign influence and apply it to the study of optimal tariffs. We develop a two-country voting model of electoral competition, where we allow the incumbent party in each country to take costly actions that probabilistically affect the electoral outcome in the other country. We show that policies end… CONTINUE READING