Openness, lobbying, and provision of infrastructure
Abbreviated Journal Title
South. Econ. J.
MARKET SHARE RIVALRY; PUBLIC INFRASTRUCTURE; ECONOMIC-GROWTH; TRADE; INVESTMENT; POLICY; Economics
Casual empirical evidence suggests that infrastructure provision is higher in economies that are open to world trade. We develop a model of imperfect competition to show that open economies are likely to provide more infrastructure than closed economies. If infrastructure is financed by taxing a producer lobby, the open economy will overprovide while the closed economy will underinvest; an open economy approaches optimal provision when this lobby group is small in size. If financing of infrastructure is done by taxing the whole population, the closed-economy outcome may be preferred relative to that of the open economy.
Southern Economic Journal
"Openness, lobbying, and provision of infrastructure" (2008). Faculty Bibliography 2000s. 186.