Maggi, Giovanni; Rodríguez-Clare, Andrés - In: American Economic Review 97 (2007) 4, pp. 1374-1406
We present a model where trade agreements are motivated by the desire of governments to commit vis-à-vis domestic lobbies, in addition to standard terms-of-trade externalities. The model predicts that trade liberalization is deeper when capital is more mobile across sectors, and when...