Endogenous Lobbying in Search of Import Protection

This paper examines the general-equilibrium effects of declining import prices on import and export industries’ lobbying. Different from the existing literature, our model endogenizes the emergence of lobbying groups, as lobbying requires both money to “buy access” to policymakers and management time to utilize it. A decline in the import good’s world price leads to an immediate rise in lobbying by the import industry. Over time, however, this initial lobbying surge diminishes and lobbying might become less than before the price fall. The export industry lobbies more over time in spite of benefiting from a higher relative price.