Book Project

Access, Institutions and Policy Influence: The Changing Political Economy of Trade Protection in Post-Reform China

This study introduces a dynamic theory of access and trade policy influence under authoritarianism, which argues that domestic interest groups facing foreign competition in authoritarian states are able to lobby for protection via both formal and informal channels of access to trade policymakers. In addition, these channels of access themselves change as the decision makers, the processes and the institutions of trade policymaking evolve over time, leading to the shifting abilities and strategies of certain domestic interest groups in providing incentives for relevant policymakers to set policies that are in favor of the interest groups.

I test the theory by examining the domestic sources of trade protection across manufacturing industries in China, a single party authoritarian state, during its transition from a centrally-planned system to a market-oriented economy over the past six decades. Using three original, large-scale datasets and a variety of statistical models, I find that the percentage of state ownership and the geographical distribution of firms, two measures of an industry’s access to trade policymakers, are significant predictors of industry-level protection in China. In addition, the domestic sources of protection change as institutional arrangements change: the 1998 administrative reform significantly reduced the influence of the state sector on China’s negotiated tariffs in the WTO, while geographical distribution did not become important until after the Party delegated its trade policy decision-making power to the state bureaucracy upon joining the WTO. These findings are further supported by comparative case studies and interviews with government officials, firm managers, trade lawyers and scholars in China and the United States over a 12-month period.

The empirical chapters demonstrated that the theory successfully explains the changing political economy of trade protection: the structure of protection in China’s manufacturing sector, both across industries and over time, reflects not only the distribution of winners and losers from free trade and the cost of lobbying but also, more importantly, groups’ differential and changing access to trade policymakers. These findings suggest that domestic groups in nondemocratic regimes have a greater impact on trade policies than is often recognized by conventional wisdom. In addition to enriching our understanding of interest group lobbying and trade policymaking in China, this study also contributes to existing work on the political economy of trade protection in China by (1) explicitly incorporating changes in the actors, institutions and processes of trade policymaking over time, (2) providing the micro-foundations of how interest groups lobby and influence trade policy outcomes in authoritarian states, and (3) accounting for both statutory (de jure) and administered (de facto) protection.