PRIMARY AND SECONDARY REFORM

An import competing industry hires lobbyists to obtain protection, whe re binding quotas may be utilized in the trade regime. Rent seekers co mpete with one another to obtain valuable import licenses. Rent seekin g and lobbying are assumed to involve similar skills, so that a reform of the rent-seeking sector will have feedback effects on lobbying and vice versa. We show that the feedback effects from reform targeting t he lobbying activity (primary reform) often tend to reinforce the orig inal reform, while reforms targeting the rent-seeking sector (secondar y reform) tend to have negative feedback effects on the reform process . (JEL D72, F13).