Title: Lobbying by capital and labor over trade and labor market policies
Abstract: This paper uses the common agency approach to analyze the joint determination of product and labor market distortions in a small open economy. Capital owners and union members lobby the government on both tariffs and minimum wages, while other factors of production are not organized. The paper shows that product and labor market distortions always move in the same direction, and that their level is not modified by social pacts between capital and labor. It also shows that labor market distortions are second best. Hence, conditionality by foreign organizations should target distortions in product markets but not in labor markets.
Publication Year: 1998
Publication Date: 1998-07-01
Language: en
Type: article
Indexed In: ['crossref']
Access and Citation
Cited By Count: 106
AI Researcher Chatbot
Get quick answers to your questions about the article from our AI researcher chatbot