When Is It Optimal to Delegate: The Theory of Fast-Track Authority
American Economic Journal: Microeconomics
vol. 7,
no. 3, August 2015
(pp. 347-89)
Abstract
With fast-track authority (FTA), the US Congress delegates trade policy authority to the president by committing not to amend a trade agreement. Why would it cede such power? We suggest an interpretation in which Congress uses FTA to forestall destructive competition between its members for protectionist rents. In our model: (i) FTA is never granted if an industry operates in the majority of districts; (ii) The more symmetric the industrial pattern, the more likely is FTA, since competition for protectionist rents is most punishing when bargaining power is symmetrically distributed; (iii) Widely disparate initial tariffs prevent free trade even with FTA. (JEL C78, D72, F13, F14)Citation
Celik, Levent, Bilgehan Karabay, and John McLaren. 2015. "When Is It Optimal to Delegate: The Theory of Fast-Track Authority." American Economic Journal: Microeconomics, 7 (3): 347-89. DOI: 10.1257/mic.20140031Additional Materials
JEL Classification
- C78 Bargaining Theory; Matching Theory
- D72 Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
- F13 Trade Policy; International Trade Organizations
- F14 Empirical Studies of Trade
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