District Heterogeneity, Legislative Bargaining, and Trade Policy

The diverse economic structures of Congressional Districts generate heterogeneous trade policy preferences. The crucial role of these district-level interests in determining trade policy in Congress is largely absent from canonical political economy models of trade (e.g. Grossman and Helpman, 1994). We address this gap by modeling the aggregation of district preferences into national trade policy through legislative bargaining. This supply-side explanation of trade policy builds on the legislative bargaining framework of Baron and Ferejohn (1989) and Celik, Karabay and McLaren (2013). The model yields a unified account of trade policy formation in which institutional design, economic and political geography, and bargaining in the presence of an agenda setter jointly determine the equilibrium level of protection.