Political Contributions for Trade Policy and National Public Finance

This study explores the relation between economic openness and government spending through a political contribution approach. This conclusion is that there exists a positive correlation between the degree of trade liberalization in organized industries and the government size, whereas a negative correlation in unorganized industries. In addition, we show that it is more difficult for the countries where a large part of industries are organized to carry out trade liberalization, as the share of national income accruing to the organized sectors decreases.