The Role of the Median Legislator in U.S. Trade Policy: A Historical Analysis

By Hansen, Wendy L.; Prusa, Thomas J. | Economic Inquiry, January 1997 | Go to article overview

The Role of the Median Legislator in U.S. Trade Policy: A Historical Analysis


Hansen, Wendy L., Prusa, Thomas J., Economic Inquiry


I. INTRODUCTION

Tariff and trade policies have an interesting and dynamic history in the United States. Of critical importance to this history is the role played by the U.S. Congress. For most of U.S. history Congress was very active in setting levels of protection for U.S. firms, passing new tariff legislation on average every five or six years. As we will show, tariff rates shifted, sometimes dramatically, following a very specific change in the makeup of the U.S. Congress, namely a change in the median legislator.

We offer a simple, well-known model of decision making to explain the behavior of Congress. Assuming unidimensionality of voters' preferences, Black's [1958] Median Dominance Theorem predicts that, under majority rule, decisions will be determined by the preferences of the median voter. In this paper, we apply the median voter model to study legislative decision making. In particular, the median voter model suggests that tariff levels should change on a regular basis as demographic, economic, technological, and electoral forces, as well as interest group lobbying, alter the preferences of the median legislator in the Congress.

We find that this simple median legislator model does an excellent job of explaining trade policy till the 1930s. However, following passage of the Reciprocal Trade Agreements Act of 1934, and particularly during the post-World War II era, levels of protection no longer shift as a result of changes in the median legislator. Trade bills are enacted with no apparent change in the median, and changes in the median legislator are not followed by the passage of a new trade bill.

Our analysis of pre- and post-1934 legislation provides strong evidence that the nature of trade policy has changed substantially. There are several possible explanations for the change, due at least in part to the growing relative prosperity of the U.S. in the world economy and to institutional changes in trade policy making. In particular, the passage of the 1934 Reciprocal Trade Agreements Act, which led to a shift of power from the legislative to the executive branch of government, followed by the creation of the General Agreements on Tariffs and Trade (GATT) and the rise of bureaucratic powers all likely impacted the nature of trade policy making in the U.S. We discuss these and other possible reasons for the breakdown of the median voter model after 1934.

II. MEDIAN-VOTER DETERMINED TARIFF

In this section we briefly review the standard endogenous tariff voting model wherein the level of protection is determined by the preferences of the median voter (Mayer [1984]; Shepsle and Weingast [1984]; Weingast, Shepsle and Johnsen [1981]).(1) In Mayer's [1984] version of this model, a uniform tariff is determined via a majority vote referendum. Each individual is endowed with capital and labor and the individuals are ordered in decreasing, relative capital-labor abundancy. Each good is produced using capital and labor under constant returns to scale, and there is perfect interindustry factor mobility. Finally, all individuals have identical homothetic preferences. Under these conditions, each individual's relative endowment of factors will determine his or her preferences toward protection. Specifically, according to the Stolper-Samuelson theorem, capital-abundant (labor-abundant) individuals will prefer policies that increase the price of products that are capital intensive (labor intensive). Moreover, an individual's approval of protection for capital-intensive industries increases with his or her capital abundancy. Within this framework, Mayer shows that the equilibrium tariff will be determined by the median voter, whose preference is determined by his or her particular endowment of factors. Mayer's model predicts that as the population changes, the tariff will change.

While the Shepsle-Weingast [1984] model does not provide the formal link between economic incentives (i. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

The Role of the Median Legislator in U.S. Trade Policy: A Historical Analysis
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.