Title

Openness, Lobbying, And Provision Of Infrastructure

Abstract

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.

Publication Date

4-1-2008

Publication Title

Southern Economic Journal

Volume

74

Issue

4

Number of Pages

1149-1166

Document Type

Article

Personal Identifier

scopus

Socpus ID

44149105680 (Scopus)

Source API URL

https://api.elsevier.com/content/abstract/scopus_id/44149105680

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