2.7 — The Political Economy of Trade Policy — Readings

Thursday, October 29, 2020 and Tuesday, November 3, 2020

Required Readings:

• Caplan, 2007, “The Myth of the Rational Voter”
• Somin, 2014, “When Ignorance Isn’t Bliss”
• Buchanan, 1984, “Politics Without Romance”
• Mitchell, 2013, “The Pathology of Privilege: The Economic Consequences of Government Favoritism”

Optional Readings

• Grossman and Helpman, 1994, “Protection for Sale”
• Baldwin and Magee, 2000, “Is trade policy for sale? Congressional voting on recent t?”

Helpful:

• Public Choice
• The Logic of Collective Action
• Government failure
• Rational ignorance
• Rent seeking
• Regulatory capture

Questions To Help Your Reading

• Why is good governance a public good, subject to a free rider problem?
• What is “rational ignorance”?
• What is Caplan’s idea of “rational irrationality” and how is it different from “rational ignorance?”
• According to Caplan, what are the four systematic biases?
• Why do people vote or not vote? How do people that do vote choose how they vote?
• What is the principle of “concentrated benefits and dispersed costs?”