Identity Politics and Trade Policy

Gene Grossman and Elhanan Helpman

No 13367, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We characterize trade policies that result from political competition when assessments of well-being include both material and psychosocial components. The material component reflects, as usual, satisfaction from consumption. Borrowing from social identity theory, we take the psychosocial component as combining the pride and self-esteem an individual draws from the status of groups with which she identifies and a dissonance cost she bears from identifying with those that are different from herself. In this framework, changes in social identification patterns that may result, for example, from increased income inequality or heightened racial and ethnic tensions, lead to pronounced changes in trade policy. We analyze the nature of these policy changes.

Keywords: Social identity; Political economy; Tariff formation; Protectionism; Populism (search for similar items in EconPapers)
JEL-codes: D78 F13 (search for similar items in EconPapers)
Date: 2018-12
New Economics Papers: this item is included in nep-hpe, nep-int and nep-pol
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (22)

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Related works:
Journal Article: Identity Politics and Trade Policy (2021)
Working Paper: Identity Politics and Trade Policy (2019)
Working Paper: Identity Politics and Trade Policy (2018)
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