Reconsidering the empirical evidence on the Grossman-Helpman model of endogenous protection

The emergence of the Grossman and Helpman (1994) model of endogenous protection as the preëminent model in the political economy of trade literature has been significantly advanced by the finding that its predictions about the cross-industry pattern of protection are broadly consistent with the data. However, in their empirical implementation of the Grossman-Helpman model, researchers have assumed the presence of multiple policy instruments and extraneous political factors. We argue that incorporating these assumptions into the theory significantly changes its predictions about the cross-industry pattern of protection. JEL classification: F1