Discussion

Summary

It is always a pleasure to read a contribution by Elhanan Helpman, and chapter 4 is no exception. This survey presents in a clear-cut and compact way the recent formal literature on political economy of trade to which Helpman and his coauthor Gene Grossman have importantly contributed. Generations of scholars and students of international trade policy will have this chapter on their reading list and will be grateful to get to the frontier of the field in just about 30 pages!

The main strength of the chapter lies in grasping the various approaches of political economy of trade protection in a single simple framework and deriving elegant explicit tariff formulae that can be easily compared. In this way, the contributions of the different models are concisely explained and transparently related to each other.

The survey starts by reviewing the various political economy approaches to trade protection (direct democracy, political-support function, tariff-formation function, electoral competition). It follows Helpman and Grossman's recent work in the field (the so-called ‘influence-driven contribution’ approach), and discusses how their approach can fruitfully be applied to the political economy of international trade relationships (international trade negotiations and the formation of free trade areas (FTAs)). I will essentially organise my discussion in two sections. First, I point out a caveat to most models that Helpman presents. Second, I suggest some potential avenues for future research which were not mentioned in the chapter.