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When Is It Optimal to Delegate: The Theory of Fast-Track Authority

Celik, L. ORCID: 0000-0002-7668-6358, Karabay, B. and McLaren, J. (2015). When Is It Optimal to Delegate: The Theory of Fast-Track Authority. American Economic Journal: Microeconomics, 7(3), pp. 347-389. doi: 10.1257/mic.20140031

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 tari§s prevent free trade even with FTA.

Publication Type: Article
Additional Information: Copyright © 2015 AEA
Publisher Keywords: Fast-track authority; Trade Policy; Multilateral Legislative Bargaining; Political Economy; Distributive Politics
Subjects: H Social Sciences > HB Economic Theory
Departments: School of Arts & Social Sciences > Economics
Date Deposited: 17 Jan 2020 16:52
URI: https://openaccess.city.ac.uk/id/eprint/23492
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