The Republican Conversion to Trade Liberalization after
Smoot-Hawley"
BY: DOUGLAS A. IRWIN
Dartmouth College
Department of Economics
National Bureau of Economic Research (NBER)
RANDALL S. KROSZNER
University of Chicago
National Bureau of Economic Research (NBER)
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Date: February 1999
Contact: RANDALL S. KROSZNER
Email: Mailto:randy.kroszner at gsb.uchicago.edu
Postal: University of Chicago
Graduate School of Business
1101 East 58th Street
Chicago, IL 60637 USA
Phone: (773)702-8779
Fax: (773)702-0458
Co-Auth: DOUGLAS A. IRWIN
Email: Mailto:douglas.irwin at dartmouth.edu
Postal: Dartmouth College
Department of Economics
Hanover, NH 03755 USA
ABSTRACT:
This paper investigates how changes in both institutional
incentives and economic interests are important for securing
durable changes in economic policy. We study how bipartisan
support developed to sustain the Reciprocal Trade Agreements Act
(RTAA) of 1934, which fundamentally transformed U.S. trade
policy. The durability of this change was achieved only when the
Republicans, long-time supporters of high tariffs who originally
vowed to repeal the RTAA, began to support this Democratic
initiative in the 1940s. We find little evidence of an
ideological shift among Republicans, but rather an increased
sensitivity to export interests for which the institutional
structure of the RTAA itself may have been responsible. We
conclude that the combination of greater export opportunities
and the institutional change which strengthened exporters'
lobbying position was required to bring about Republican support
for trade liberalization.
JEL Classification: D72, D78, F13, N72