Endogenous export subsidies as a revenue-seeking activity: some implications for the evolution of protection

Explaining the anti-export bias of trade policy requires a model in which t here is some asymmetry between protection of the import competing and expor t sectors. One asymmetry is that export subsidies require government expend iture, while import tariffs raise revenue for the government. A model is de veloped where lobbying for export subsidies is treated as a revenue-seeking activity. In contrast with the import-competing sector, it is found that t here is no presumption that 'vicious circles' exist in the export sector, w here a 'vicious circle' refers to the tendency for exogenous political shoc ks to be amplified by an endogenous lobbying response.