Lobbying for Cheaper Inputs? Political Economy and Export Taxation with Olga Solleder
Many governments levy exports taxes that are likely to be welfare reducing. This paper investigates whether the imposition of export taxes is driven by lobbying. We construct a political economy model of export taxation that creates a political rivalry among organized special interest groups within a value chain. The model predicts that an intermediate good will be taxed when the lobbying power of its producers is lower than the combined lobbying power of the producers of final goods that use it as an input. Second, we test the model on a subset of countries that apply export taxes and for which disaggregated data is available.