Industrial Location and Protection: The Political and Economic Geography of U.S. Nontariff Barriers Author(s): Marc L.

Busch and Eric Reinhardt Reviewed work(s): Source: American Journal of Political Science, Vol. 43, No. 4 (Oct., 1999), pp. 1028-1050 Published by: Midwest Political Science Association Stable URL: http://www.jstor.org/stable/2991816 . Accessed: 31/10/2012 15:22
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Industrial Location Protection: and ThePolitical Economic and Geography ofU.S.NontariJf Barriers
Marc L. Busch, Harvard University Eric Reinhardt, Emory University The debateovertherelationship between location industry theincidence of the of and import barriers beenmiscast. has Threeproblems into call question findings the reported intheendogenous protection literature. geographic is First, concentrationwidely usedas a proxy political for of concentration thespread industry acrosspolitical (i.e., districts), thesetwovariables conceptually empirically although are and distinct. Second,extant measures geographic of concentration ignore spatialrelationship the amongunits (e.g., counties states) which or in "lumpy" industries maketheir home, often to thereby failing detect in in concentration where exists. it Third, those studies which few concenpolitical tration receives direct any attention all,nonmonotonic at effects interaction and terms are seldomtested, their in of despite grounding theories interest group politics moregenerally.This article addresses three all problems. results The indicate that geographically concentrated politically but dispersed industries theonesmost are to relief likely receive from imports, although handful very a of largeindustries benefit from beingpolitically concentrated. article The thusrevealshowto reconcile twocompeting the hypotheses around whichone of endogenous protection theory's mostenduring debateshas taken shape.

One of themostenduring literadebatesin theendogenousprotection tureconcerns relationship and the betweenthelocationof industry theincidence of import barriers. This debateis widelyframed aroundtwocompeting hypotheses: first the positsthatgeographically concentrated industries are morelikelyto act collectively lobbying protection, in for givingthema loud voice in tradepolitics;thesecondholds thatgeographically dispersed industries morelikelyto have broadpoliticalrepresentation are (undercertainelectoral rules),givingthem greater a number voices in trade of politics. Despitea considerable amount empirical of testing, however, juryis still the outon whichof thesehypotheses correctly signsone of endogenous protecWe thank John Blodgett CIESIN andAndrew of Haitof theCensusBureau,as well as James Alt, James Anderson, LawrenceBroz, Rick Doner,Jeff Frieden, Richard Friman, John Iceland,Lisa Martin, Fiona McGillivray, Patrick Moriarty, MichaelRich,Ron Rogowski, PeterRosendorff, B. KenScheve, Cheryl Schonhardt-Bailey,Schwartz, Ed MikeTomz,Richard Tucker, thePolitical and Economy LunchGroupat Harvard University helpful for comments. remaining All shortcomings are,ofcourse, own. our American Journal Political of Science,Vol.43, No. 4, October 1999,Pp. 1028-1050(D1999bythe Midwest Political ScienceAssociation

INDUSTRIAL LOCATION AND PROTECTION

1029

tion most theory's salient variables. argue thefindings theliteraWe that in are ture difficultinterpret, the to given tendency conflate to geographic with politicalconcentration,latter the measuring spread anindustry the of across electoral districts. disentangle variables explaining pattern We these in the of nontariff barrier (NTB) protection four-digit manufacturing for U.S. industries 1990.We find geographically in that concentrated politically but dispersed industries more are to relief from likely receive imports, although a handful very of large industries benefit being from politically concentrated. Bothsidesofthedebate thus are partly right, although for not reasons that either couldexplain. side In addition letting political to the concentration variable testify itself, for we create newmeasure geographic a of concentration. of Existing studies economic geography uponmeasures suffer what rely that from White terms the"checkerboard in problem" fail (1983,1010-1011), that they toaccount for spatial the relationship among geographic units. Imagine, example, for that squares a checkerboard parcels landandthat the on are of is industry located only the on blacksquares thus and quite dispersed across board. the Now imagine secondcheckerboard which squares sorted a on the are by so all blacksquares industry contiguous, areall the color, that the with are as redsquares without industry. most of Surprisingly, measures geographic concentration cannot between thesetwocheckerboards, distinguish even is though industryinvariably "lumpy" the more on latter. neglecting By spatialrelationships the units among geographic inthis studies manner, existing thus totest hypothesis closephysical fail the that lowers costs the proximity oforganizing monitoringindustry's and an efforts "turn the to out vote." Our measure corrects checkerboard the a more direct of problem, permitting test whether concentrated industries better toovercome are geographically able thecollective in action inherent lobbying protection. for problem we several alternative Finally, examine of relationship specificationsthe between location industry theincidence barriers trade. the of and of to Spewe the that cifically, test hypothesis moderate concentration maxipolitical mizes as to or protection,compared lesser greater levels political of concentration. alsoconsider hypothesis the We the that interaction between political concentration industry is thekeytopredicting and size which are industries mostlikely receive to relief from imports (Salamonand Siegfried 1977; concentration fail Snyder 1989).Studies including political typically toincludethis interaction (butsee McGillivray term to 1997),one deemed be in important theories interest of more group politics generally (Cameron, and Epstein, O'Halloran the evidence bear1996).Ourarticle provides first ingon these whilesimultaneously hypotheses from distinguishing political concentration resolving checkerboard and the geographic problem.

1030

MarcL. Buschand EricReinhardt

1. THE LITERATURE

Endogenous protection theory longsought teaseoutthepolitical has to of implications economic geography. Mostof theliterature beginswith Olson's(1971)puzzleabout collective action. Sinceprotection benefits often in all ofthefirms an industry of regardless whether individually they lobby, firms a strong have incentive free oneachother's to ride efforts. result The is a suboptimal ofpolitical level on part theindustry a whole of activity the as (Olson1971,35,44-45).The"closegroup" as hypothesis,we callit,posits in that transaction incurred organizing monitoring costs and effective lobbywith the ingdecline closephysical for to proximity, lessening incentive firms freeride (Pincus 1975; Lavergne1983; Hansen 1990; Trefler 1993).1 contends communications that Schonhardt-Bailey 38), for (1991, instance, andtransportation areless onerous industries costs for in concentrated a given region, to enabling these firms establish closer contacts keep and better tabson eachother's efforts turn thevote. to out costshave these Although in of surely declined the"information the age," density contacts among businessgroups still is on greatest a local scale.Indeed, because these regional clusters more tune are in with concerns suppliers customers, the of and they arebetter toarticulate demands aredispersed able than their industries (Porter1990,154-159). Thosewhosubscribe this to a viewthus expect positive between concentration import and relationship geographic barriers. A competing that becausegeographically hypothesis posits dispersed have their industries broad political representation, demands protection for are morelikelyto be granted (Pincus1975; Caves 1976,284; Estyand Caves 1983).As Rogowski this (1997) explains, "dispersed group" hypoththe esis obtains where electorate votesacrosssmaller dissingle-member the but votes or tricts, notwhere electorate as a national constituencywhere In United out vote. the purer proportional representation tosmooth the helps where hypothesison solidfooting, expectationthat this is the is States, geoare graphically dispersed industries morelikely receive to protection because of their in greater political representationCongress (McGillivray in 1997).Thedispersed group hypothesis,contrast theclosegroup to argufocuses thedynamics representationpolitical on of in institutions ment, rather theintensity protectionist than of on of pressures thepart industrial constituents. whosubscribe this Those to a viewpredict negativerelationbetween concentration import and barriers. ship geographic Howdo these of stack The hypotheses up inlight theevidence? empirical literature shedssurprisingly light howto signthegeographic little on
'This point quitedistinct is from Olson's (1971) argument aboutgroup size,eventhough both variables speaktothecapacity organize monitor to and collective action. Smaller groups notnecare more and a in essarily proximate, vice-versa, point which notexplicit Olson(1971,see 46-47). is

INDUSTRIAL LOCATION AND PROTECTION

1031

much attention in or this merits whether variable concentration variable even hypothesis. exFor the supports closegroup thefirst place.Someevidence States, Hansen in in of protection theUnited ample, a study administered states were more in that with (1990,36) reports industries operations fewer favor eson rule Trade likely havetheInternational Commission intheir to between 1974 duty and cape clause,anti-dumping, countervailing filings reductions in shows trade that barrier (1997,99) similarly and1985.Milner for (NAFTA)weresmaller geotheNorth American Trade Free Agreement Moore(1996, Alongthese samelines, industries. graphically concentrated of political influence theU.S. steel that 23-24,30-31) argues thedeclining dispersion geographic in to industry the1990sowedlargely theincreasing in action committees, political ofthis Finally, a study corporate of industry. concenthat and (1994,918) find geographically Grier, Munger, Roberts less contributions between trated industries considerably oncampaign spent their bolstered their because closephysical proximity likely 1978and1986, lookto elected officials influence to ability voteas a blocandthus directly box. ingfor returns the at ballot For favors dispersed evidence the Other group hypothesis. example, a inhis seminal of Act study theU.S. Tariff of 1824,Pincus(1975) finds concentration protecand between geographic relationship strongly negative disperthat Ray tion. Similarly, (1981,116-117)demonstrates geographic in NTB protection U.S. industries 1970, for sionsignificantly increased in caseofforty-four U.S. much LopezandPagoulatos as (1996,244)find the in in industries 1987.Finally, an important manufacturing foodandtobacco of Schonhardt-Bailey century Britain, trade lobbyin 19th study thefree of most industries certainly that dispersion export (1991)reports geographic of side number voicesintrade politics. gavethepro-liberalization a greater of she that However, also finds thekeytothesuccess thepro-liberalization the "core" loudvoicein cotton it sidewas that hada very textiles, nation's concentrated. highly geographically which export industry, was,bycontrast, in uncover little reason putmuch to stock either Stillother studies hyon For Caves' (1976,294) article Canada'stariff policy pothesis. example, of but a andTrefler's (1993,145)analysis U.S. NTBsfind positive insignifiand Conconcentration protection. cantrelationship between geographic and Salamon Siegfried and (1977,1038)andEsty Caves(1983,35) versely, concentration several and showthat relationship the between geographic often of is but of influence industry negative more measures thepolitical on results, Lavergne (1983, than insignificant. not Reflecting hisownmixed concenthat geographic a cited by study insisting the 154)concludes widely at tration impact all." variable most likely "hasnotrue in the to Three make difficult interpret results it reported the problems and aboveconflates political economic literature. eachofthestudies First,

1032

MarcL. Buschand EricReinhardt

geography. is more This than little a troubling, the since closegroup disand ofindustrial distinct location. Afpersed group hypotheses quite tap aspects terall,an industry clustered within given a be dispersed across region may electoral districts, as a geographically just dispersed industry be politimay the For and callyconcentrated. example, "bolts, indusnuts, washers, rivets" inthe concentrated Midwest. since is try (SIC 3452)is geographically it Yet, in located a heavily populated with area small accordingly electoral districts, thisindustry spread is across100U.S. Houseconstituenrelatively evenly cies.On theother and extreme, building repairing" 3731)is geo"ship (SIC graphically dispersed the along Atlantic, andPacific Gulf, coastlines, 80 but of is concentrated twenty-five injust percent itsnational employment House districts.2 Theseexamples revealthat concentrationa poor is geographic proxy political for and the concentration vice-versa. conflating twoconBy has the cepts, literature confused issue. the Second,mostmeasures geographic of concentration plaguedby are checkerboard the White's problem: ignore spatial they relationship among units. This undermines of theclose grouphypothesis, tests geographic all of To which after is basedon thephysical members. ilproximity group lustrate whatis at stake, the consider "broadwoven fabric mills, cotton" tomeasure (SIC 2211) and"instruments electricity" 3825) industries. (SIC The conventional index-whichignores Herfindahl spatialproximityranks almost in these industries of conidentically terms their geographic that wouldoffer little into centration, suggesting thisvariable insight any in levelsofprotection. 75 percent 1987national differences their Over of in millsindustry fabric employment thebroadwoven is (54,500workers) located within 200 mileradius Clemson, Yetless than percent a of SC. 50 in workforce theother lies 1200 (41,846)ofthenation's industry within milesof Centralia, and therestis evenlyspreadup and downthe KS, coasts.Strikingly,thetwoindustries, broadwoven of millsare fabric only Butthecritical between these industries terms in protected. difference two ofgeographic concentration cannot detected methods be in existused by ingstudies. where Third, concentration receives attentionall,the at tenpolitical any is for between variable protecthis dency totest and only a linear relationship recent on of tion. work theoptimal However, and dispersion interest groups electoral that instead nonbe redistricting suggests therelationship might monotonic and (Cameron, Epstein, O'Halloran 1996;Rogowski 1997).Furconcentration interact industry (McGillivray with size ther, political may
2Readerscan view maps of employment these industries http://userwww.service. in at emory.edu/-erein/research/geocon-appendix.pdf.

INDUSTRIAL LOCATION AND PROTECTION

1033

1997), sincelargeindustries from might benefit beingheavily in represented a givenelectoraldistrict, even if smallerindustries would do better they if weremoreevenly dispersed acrossdistricts (Snyder1989). We test bothalternative hypotheses.
2. THE MODEL

This sectionsetsoutthemodelwe use to explaintheincidence NTBs of acrossa sampleof 363 four-digit manufacturing U.S. industries 1990.3 in

2.1 Dependent Variable

Our dependent variableis a measureof NTBs that reports incidence the rather thantheintensity protection. includesonly"hardcore" barriers, of It such as bindingquotas, tariff quotas, voluntary counterexportrestraints, vailingor antidumping duties, and outright prohibitions (Anderson1996, 3, in 13). The dummy variable NTB is measured 1990 and is scored1 ifat least of Harmonized and fifty percent thefour-digit Commodity Description CodingSystem (HS) codes matching givenfour-digit a Standard Industrial Classification (SIC) code are coveredby suchnontariff barriers otherwise).4 (0 Our measureof protection focusesexclusively NTBs and nottariffs on fortwo relatedreasons.Specifically, limitsplaced on giventhesubstantial tariffs theGeneral on by Agreement Tariffs Trade(GATT) in thisperiod, and U.S. protection was morelikelyto take theform NTBs, whichare estiof matedto have impededimports morethantariffs far (Marveland Ray 1983, 190-191; Trefler 1993, 154; Lee and Swagel 1997,374). Also, as Ray (1981, 116) has shown,whereastariffs affect significantly NTBs, NTBs have little influence tariff on levels. Thus, in line withthemajority cross-industry of studiesof post-Kennedy Round tradebarriers, proceedwithtariffs a we as side right-hand variable(see below) andNTB as ourdependent variable.
3Thesampleincludes 459 four-digit all manufacturing categories the1987Standard in Industrial Classification (SIC) list,minusmissing data (due almostentirely thetrade to flowand trade policyvariables described below). It is publiclyavailableat http://userwww.service.emory.edu/ -erein/research/#geocon. Expansion thesampleis constrained lackof NTB dataacrosstime, of by limited subnational geographic employment for data other and incountries, low-quality missing or dustry concordances acrosstime countries. and 4Whetherfour-digit code was covered an NTB in 1990was determined Anderson a HS by by in "t_us_fin.asc" "t_us_int.asc" Feenstra, from (1996),as contained thefiles and and Lipsey, Bowen (1997). Anderson's NTB measure turn an aggregate in is from dataat thesix-digit computed HS level, originally obtained from authoritative the UNCTAD TradeInformation System (TRAINS) database(Feenstra, and Lipsey, Bowen 1997,36-37). The HS-SIC concordance obtained file was in "concord.dbf' from U.S. BureauoftheCensus(1994b).

1034

MarcL. Buschand EricReinhardt

2.2 Independent Variables

Geographicconcentration

concentration GEOCON,a decreasing using We quantify geographic to eachemployee thenational or "centroid," function thedistance from of a accurate for given GEOCON is basedon highly estiindustry. midpoint, denote data Specifically, mates county-industry of employment for1987.5 industries i, i E { 1, 2, . . . , n}, countiesas k,k E { 1, 2, . . ., min,and the as i in and of k number jobs in industry county as jik. The latitude longitude of k centroid county is the vectorPk = ofthe employment-weighted calcuindustry employment-weighted centroid, (plat, plong) .6 Thenational
clong), employment data,is thevector = (ctat, latedfrom county-industry ci
m

whereci =-

Pkjik inm . The distance centroid to national from county Pk

jik
k=1

centroid is designated where dustry ci dik,

dik =

3949.99* arccos(sin(|cfatl arctan(l)/45) sin( |platlarctan(l)/45)+ *

* cos( |ciatarctan(1)/45) cos( platlarctan(1)/45) cos(( Ci.n arctan(1)/45)

(plong arctan(l)/45))) .7

can be as concentration then expressed follows: Geographic

GEOCONi=

k=

Xf(dik
m

)ik
,

wheref(dik) =e-des

m
k=1

jik

and units geography industry usedhereareparfigures thedetailed for 5Official employment county-industry we to reasons. Accordingly arecompelled estimate tially unavailable anonymity for highly correlates 1997, 594) whoseoutput usinga procedure (McGillivray employment instead, figures = 0.946). See http://userwww.service.emory.edu/-erein/research (r with nonmissing official for information. geocon-appendix.pdf more (U.S. Bureauof theCensus and border definitions weights county 6Weuse 1990 population [CIESIN] 1998)because1987 Network Earth andConsortium International ScienceInformation for valuesareunavailable. distance expression. 7Wethank John Blodgett, CIESIN, forthis centroid national to (nonindustryfrom county 81nourcase, s = 631.43,or themeandistance extreme distances notreceive do unchosenarbitrarily scale theindexso that to specific) centroid,

INDUSTRIAL LOCATION AND PROTECTION

1035

attention. this Several characteristics ofGEOCONmerit First, measure explicitly recognizes spatial the relationship among geographic units, not of internal justthedistributiontheir characteristics, correcting thus White's much agcheckerboard problem. Second, GEOCONis calculated from less and gregated geographical (counties units versus states) industry definitions (four-digit instead three-digit) are mostother of than studies' measures no (Krugman 1991, 57-58).Third, GEOCONcontains missing industry data for source biasin of eachofthe component geographical animportant units, the other studies (Krugman 1991,57). Forthese reasons, especially first, with Gini-andHerfindahluncorrelated standard GEOCON is relatively we basedmeasures, instead a distinct-and, argue, constituting superiorof concentration.9 concept geographic
Politicalconcentration

the ofan emThevariable POLCONmeasures concentration industry's It ployment acrosselectoral districts rather economic than geography.also on it from characterisdiffers GEOCONinthat is basedsolely theinternal and them. politiThe ticsofdistricts notonthespatial relationships among in cal geography in constructing used POLCON is theHouse district the index district of 102nd Congress.10 POLCON is a Herflndahl employment
due weight. use oftheexponent negative The of distance, notlinear and distance, makesGEOCON a measure concentration than of rather dispersion is suggested White and by (1983, 1013).However, belowareall substantively if calculated with theresults reported identical GEOCON is alternatively in for as variable, although, itturns ftdik)= dik.HawaiiandAlaskaareexcluded all calculations this out,ourresults notat all sensitive their are to inclusion. 9TheHerfindahl indexof geographic concentration simply sumof thesquaresof the is the in is county sharesof national employment that industry (Pearce 1992, 184). The Ginicoefficient G. =1 +!m
m

riJk ji,) ik

where k is therank county employment thecounties of k's when

k=1

of are sorted decreasing in order jobs (Pearce 1992, 172). The correlation GEOCON with of geoGini graphic concentration indexes using Herfindahl, andKrugman's Gini, (1991,55-56) alternative is notethat formulas, respectively,a mere 0.311,0.263,and0.245 (N = 453). We should GEOCON between and does,however, to discriminate fail properly highly dispersed industries ones concenin measure is trated onlya fewvery distant locations. White's(1983, 1012,Equation alternative 4) to in to superior GEOCON on thisscore,butitis prohibitively expensive compute ourcase. Fora randomsampleof seventeen betweenWhite'smeasureand industries, though, correlation the of is are usGEOCON (usingtheexponent negative distance) r = 0.871 (r = 0.978 ifboth computed in the inglinear distance instead). practice, In then, industries ourdataset few exhibit one kindof For see concentration GEOCON onlyweaklydetects. moreinformation, http:// that geographic userwww.service.emory.edu/-erein/research/geocon-appendix.pdf. I'To theextent thatlegislators factored their constituencies' into decision preferences their in making trade on policy 1990,they presumably most were concerned abouttheconstituencies they and which were102nd districts. wereaiming wininthe1990primary general to elections, Congress

1036

MarcL. Buschand EricReinhardt

fora givenindustry. Specifically, POLCONi

Iih /iih)0

whereiihis

the number jobs in industry in House district To getJih, we started of i h. withthecounty-industry estimates used forGEOCON and employment (Jik) II matched counties House districts to usingarea allocationratios.

2.3 Control Variables

Industrial concentration The variableINDCON measurestheconcentration domesticmarket of shareacrossfirms a givenindustry. in Specifically, INDCON is a Herfindahl index of thedollarvalue of the 1987 domesticshipments theindustry's of 12 fifty largest companies. The relationship between INDCON andprotection is widelydebated.The morefamiliar holds thatbecause indushypothesis trialconcentration meansa smallnumber significant of values firms, higher on thisvariableimplylowertransactions costs and greater rentsto be had from such thatINDCON shouldbe positively import relief, relatedto NTB and (Marveland Ray 1983; Hansen 1990; Trefler 1993, 141; Grier, Munger, Roberts1994; Lopez and Pagoulatos1996, 239). The lesserknownhypothesis holds,on thecontrary, industrial that concentration attracts attention the of regulators benton increasing or as competition brandstheindustry undeof relief because of existing suchthat serving import INDCON should rents, be negatively related NTB (Salamon and Siegfried to 1977, 1038; Ray 1981, 108, 116; Esty and Caves 1983, 30). The evidence has not consistently either moreoften thannotrevealing insignificant an supported hypothesis, relationship betweenindustrial concentration protection and (Caves 1976, 286-287; Hansen 1990, 35-36). This maybe partly because industrial concentration oftenused-as a proxyforgeographic is and politicalconcentration. Our interest lies in whether industrialconcentration exertsa more effect whenexplicitly for transparent concentration controlling thoseother variables. Industry size The variableSIZE is nationalemployment industry 1989, in tens in by of thousands.13 politicalinfluence an industry widelypredicted The of is to
IISource: U.S. BureauoftheCensusandCIESIN (1998). POLCON couldalternatively calbe culatedusingSenatedistricts (i.e., states)insteadof House districts, witha Gini insteadof a or index(see note9). As itturns however, no suchvariant POLCON do ourreHerfindahl out, of with sults differ substantively those from presented. 12Thisoriginal Herfindahl indexis divided one thousand ease ofpresentation results. by for of Source:U.S. BureauoftheCensus(1998). BureauoftheCensus(1997), file"asm_i2.dbf' 13U.S. (variable emp).

INDUSTRIAL LOCATION AND PROTECTION

1037

increasewithits size because greater employment means morevotes,thus improving odds thatan industry's the demandsforprotection be heard will for by officials vying (re)election (Milner1988,259-260; Hansen 1990, 35; Lee and Swagel 1997, 378-379; butsee Estyand Caves 1983; Trefler 1993, 145). Alternatively, might negatively SIZE be related protection, to reducing theworkforce's abilityto mobilizecollectively by raisingtheindustry's or in profile theeye's of consumers who oppose protection (Caves 1976, 284; Salamon and Siegfried 1977, 1032). Tradeposition We gauge an industry's tradepositionwiththe variableIMPEXP, the ratio of importpenetration exportdependence,based on 1989 data.14 to IMPEXP taps theextent whichan industry threatened to is moreby import than penetration itgainsthrough exports. HighervaluesofIMPEXP are thus predicted increasethelikelihood protection. to of Hourlywage the workers WAGEHOURmeasures averagehourly wage ofproduction in are by industry 1989.15 High wage industries thosewiththegreatest proand ductivity thuscomparative advantage,so WAGEHOUR is likelyto be relatedto NTB (Lee and Swagel 1997, 378-379). negatively Tariff The variable TARIFF is the trade-weighted in average nominaltariff 1990 forall four-digit lines matching givenfour-digit industry.16 HS a SIC levels are positivelyrelated to Many studies reportthatexistingtariff formsof protection thatthese are complementary NTBs, implying (Ray 1981; Marvel and Ray 1983, 195-196; Lee and Swagel 1997, 379). Other studiesfind, that are relatedto NTBs, sughowever, priortariffs negatively of thattheseare insteadsubstitute forms protection gesting (Mansfieldand in Busch 1995). Evidence favoring either is hypothesis important evaluatNTBs are "old wine in new bottles"or a new threat trade to ing whether liberalization.
14No industry oursamplehas zeroexport in dependence, IMPEXP is defined all cases. so for of See McGillivray (1997,597) fora similar specification. central The results thearticle no difare ferent import if penetration export and dependence together substituted IMPEXP inthemodare for els reported Table 1. Import in penetrationimports domestic is (for consumption only)overimports plusdomestic shipments. Export dependence exports domestic is (of production only)overexports plus domesticshipments. Shipments data are fromU.S. Bureau of the Census (1997), file "asm_i2.dbf'(variablevalue). Imports data are from U.S. Bureau of theCensus (1994b), file "imp_comm.dbf' (variable Export datafrom U.S. BureauoftheCensus(1994a), file val_con_89). "exp_comm.dbf' (variable value_89). 15U.S. BureauoftheCensus(1997), file"asm_i2.dbf7' (variables wagesandhours). 16Forthesource, note above. see 4

1038

Marc Busch EricReinhardt L. and

on in Descriptive statistics all of thevariablesare reported Table 1.17 We estimate following the model: probit
Pr(NTBi = 1) = F(fo + fIGEOCONi + f4SIZEi + sTARIFi +
ModelII

+ 32INDCON1 6IMPEXPi
ModelIII

+ P3POLCON1

+ 7WAGEHOUR

+ rPOLCON72

+ IgSIZEi

* POLCONi),

wherei E [1, 2,. . ., 459] (industries), F(-) is thecumulative and standard All normal distribution.18 right handside variables, are exceptTARIFF, measuredat least one yearbefore1990 to avoid simultaneity. expectedefThe fectof GEOCONand IMPEXPon NTB is positive;of WAGEHOUR, negative; and of INDCON,SIZE, and TARIFF, eitherpositiveor negative.In Models I-III, we includeall thosevariableswhilevarying specification the of theeffect POLCON on NTB. Model I testsforthepositivemonotonic of relationship betweenPOLCON and NTB thatis widelyhypothesized the in Model II adds thesquareof POLCON to permit nonmonotonic a literature. (i.e., n-shaped) relationship, positedin theliterature interest as on group politicsmore generally(see Cameron,Epstein,and O'Halloran 1996). In Model III, we testforan interaction betweenPOLCON and SIZE, enabling us to evaluatewhether electoral the cloutof industries concentrated relain few varieswiththenumber votestheir of tively politicaldistricts workforces represent (Snyder1989). 3. RESULTS The results Models I-III are reported Table 1.19Overall,themodfor in els perform quitewell. The pseudo R2s rangebetween0.44 and 0.46. Tests revealno problemswithcollinearity.20 Heteroskedasticity are bordertests line positivein Models I and III and positivein Model II, so in Table 1 we
17Notable bivariate correlations as follows: are GEOCON with POLCON, r = 0.344 (N = 363), withINDCON, 0.139, withIMPEXP, 0.030, and withSIZE, -0.102; POLCON withINDCON, 0.479, withSIZE, -0.190, and withIMPEXP, -0.009; INDCON withSIZE, -0.023, and with IMPEXP,-0.040; SIZE with IMPEXP,-0.023. 18Tolimit collinearity ModelsII andIII without in affecting estimates theother the for variables,we "centered" POLCON bysubtracting 0.0921 (its95th percentile value). 19These modelswereestimated with probit, the robust command Stata5.0. Model specifiin cation tests also drew thehetprob regprocedures. on and of on 20Specifically, regression each independent OLS variable all theothers yieldsR2values that average 0.221,0.259,and0.282 forthethree models, respectively, whichforno variables and aregreater 0.506. ("Max collinearity inTable 1 liststhemaximum R2for variables than R2" the such in therespective model.)Of all thevariables, POLCON, INDCON, and WAGEHOUR exhibit the greatest collinearity, (with exception and one noted below)theestimates these for variables quite are or stableto theinclusion exclusion theothers. of

INDUSTRIAL LOCATION AND PROTECTION

1039

of ModelsofNTBs Table 1. Estimates ThreeProbit SIC Industries, 1990) (US, 4-Digit ~~~~Mean
Prob(NTBi=1) Model Model I Monotonic in Non-monotonic inPOLCON POLCON Min-Ma

iSI).

0.110*0.3149 0-1

JNDCONi POLCON_ Z TARIFF IMPZEi TARL Ni CO

-0.468
-2

(0.011)

-0.514

(0.701)

0.00432094

0.704:t0.629,

0.029?0.11, 0.003?0.040, 0.030* (0.016) 0 139.8419

~(32.240) 0.050 0.030S (0.016) (4.242) (4.242) _ ~~~0.002-1.387 0.4.09?2.162, ~~~~0.003-1.357 0.0048.859 0.053 .0410 ,

119.810
(3.243) (3.243) 0.0361 (0.016) 13.9-* 0.0312 (0.016)

POLCONI
IMEXPi

(3.34) -2.147

0.07?0.2041,
4.29?26.162, 0.01-486.95

0.O-0.1244

Maxcllin(2a.y0)20.4240

0.

L retrcte) (15.3130 (12.9314 an SIZE;0 1-aldpfralohr.Decitv1ttsisd POLCON,SIZE, POCN used0in0Model4.97-17.870 rate0thecentering6for1POLCO

LL (unrestricted).070)398 170.149

S.
o incopo

deoe paenhee. 12* RobstGEsOUin 94.2 % coffectly pred. 0.441 Pseudo-wR2 0.400 Max collinearity

0.05, *p10.1.2-aiedp?orINCO, 93.9 0.443_ 0.506

0ARF,

* RobustSEs in parentheses. denotesp < 0.05, ** p < 0.01. 2-tailedp forINDCON, TARIFF, statistics notincorpodo all POLCON, SIZE, andPOLCON*SIZE; 1-tailed for others. Descriptive p ratethecentering POLCON usedin ModelsII-III. for

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report robuststandard errors, whichare consistent even underheteroskedasticity.21 The article's firstobjective was to disentanglepolitical fromgeographic concentration. dividends doingso are clear,although The to Table 1 revealsthattherelationship betweenPOLCON and NTB is notas straightforward theliterature as might have it.Take Model I, in whichPOLCON is testedby itself.Here, thevariableis negatively signedin keepingwiththe dispersionhypothesis,but the coefficient insignificant. Model II, is In whichincludesPOLCON as well as POLCON2, thereis no evidence of a m-shaped effect: bothcoefficients insignificant. Model III, whichinare In cludes an interaction betweenPOLCON and SIZE, we findnotonlya positiveand highly statistically significant relationship betweenthisinteraction termand NTB (p < 0.01), but also a stronglynegative coefficienton POLCON by itself(p < 0.05). This finding lends support thedispersion to hypothesis, qualifiedby theresult POLCON*SIZE, in that for politicalconis centration notas detrimental larger for industries it is forsmallerones. as Noticefurther therelationships observein Models 1-111 insensithat we are tiveto alternative measuresof POLCON.22 Considerthesubstantive significance POLCON. In general,it has a of modesteffect NTBs, exceptin thecase of a handful unusuallylarge on of industries. Figure1 depictsthe(Model III) predicted that probability NTB = 1, holdingall othervariables at theirmeans, as POLCON and SIZE vary from their10thpercentile 90thpercentile to values in thesample.Over this range,POLCON can changetheprobability an NTB by only2.2 percent of whenSIZE is at itsmean,and SIZE, 9.8 percent.23 BothPOLCON and SIZE have skewed distributions, which complicatesthe interpretation these of
2'A heteroskedastic probit modelwith variance function conditioned all independent on variablesreveals borderline significant or in GEOCON andIMPEXP. (Waldtests heteroskedasticity of thehypothesis thesetwovariables' that variance coefficients equal zeroyield = 0.064,p = 0.015, p andp = 0.060,respectively, Models1-111, for whilefailing reject hypothesis thevariance to the that coefficients theother of variables jointly are equaltozero.)Re-estimated models with variance functions conditioned on these variables notundermine statistically only two do the significant results rein ported Table 1 forGEOCON. 22In particular, calculated we Herfindahl Giniindexes and using both Senate(state)andHouse district All units. suchvariants POLCON yieldinsignificant of results ModelsI andII andposiin tiveandsignificant with interactions SIZE inModelIII. It is also worth that noting thePOLCON resultsarereasonably robust alterations thecoding thedependent to in of variable. Thatis,ifwe use a continuous version NTB instead thedummy of of variable (anduse OLS), orifwe makethethreshold fortheNTB dummy 10,20, 25, 30, 40, 90, or 100 percent 0, instead 50 percent, findings of the from ModelsI-III remain unchanged. 23Over POLCON's entire with meanSIZE, themaximum range, that changein theprobability NTB = 1 is 27.3 percent; for is similarly, SIZE, thefigure 12.8percent.

INDUSTRIAL LOCATION AND PROTECTION

1041

Figure1. ImpactofPolitical Concentration (POLCON) on Predicted of on Employment (SIZE) Probability NTBs,Conditional Industry
POLOO 0. 0.15 0.1 0.05 0 250 0001200 0.0200406 0.08

results.24 facilitate To we values"for interpretationcan calculate "tipping both which marginal POLCONandSIZE,beyond the effect the of other variin ableis positive.25 Increases SIZE decrease NTBs for concentrapolitical in tion values to0.076,which amounts 93 percent theindustries the to of up in with sample.Increases POLCON decreaseNTBs forindustries up to in whichincludes59 percent theindustries the of 26,996 employees, three the363 industries values both of have of variables above sample. Only these and casesdo thevariables these have tipping points, inonly together a netpositive on predicted impact NTBs.26
24For example, percent thesampleindustries a valueof POLCON less than 95 of have 0.088 andhaveless than135,200employees. themeanvaluesforthecases in thetopfivepercentiles Yet for each variable 0.173 and238,611,respectively. are 25For tipping valuePOLCON*, set P4SIZE + g9SIZE * POLCON* = 0, so that POLCON* = value SIZE*, set I3POLCON + 19SIZE* * POLCON = 0, so thatSIZE* = -44/59. For tipping valuesof thebetasfrom Table 1 (and removing "centering" the from Takingthefitted -439/ The reader shouldbe cauPOLCON), POLCON* = 0.076 and SIZE* = 2.7, or 26,996employees. that thesespecific valueshavemeaning tioned tipping onlyin thecontext thisparticular of sample these are (1989 employment data).Whether tipping points stable acrosstime, instance, a quesfor is this tionthat study does notaddress. 26NTBsareobserved just twoof thosethree in industries. is worth It that noting in thosetwo cases INDCON takes valueswellbelowaverage; on hencetheobserved interactive effect size and of concentrationnotan artifact industrial is of concentration. political

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MarcL. Buschand EricReinhardt

To sumup,these results suggest most that industries better when are off dispersed across electoral districts, although benefits political the of dispersiondecline nonexistence moderate-sized larger to for and industries. Ina of deed, handful extremely sizableindustries tobenefit greater stand from concentration. In addition, political size the larger reduces prospects profor in tection most industries, ceteris paribus. The article's secondobjective to test close-group was the hypothesis more fully using measure geographic by a of concentration solvesthe that checkerboard The between problem. relationship GEOCON andNTB is and positive highly statistically significant< 0.001)across three (p all moda ringing els,offering endorsementtheclose-group of This hypothesis.27 is impressive, given that thesemodelsalready control industry infor size, dustrial and across concentration, concentration political The geography.28 measure geographic of we concentration use makes thedifference: all conventional indexes insignificant substituted GEOCON,revealing are when for thecritical the importance correcting checkerboard of problem.29 Also, and in GEOCON's effect significance ModelsI-III does notchange the if it units which is basedarestates of geographic upon instead counties. is That to say,seventy-four more times its aggregation-with consequent potential for bias-stilldoesnotsmooth thesubstantively over in variation important GEOCON(Ellison Glaeser and 1997, 910-914). GEOCON'seffect NTBs is substantivelywellas statistically on as significant. the variables their at in Specifically, holding other means Model the of III, GEOCONcan increase probability an NTB byup to40 percent, it making protection when otherwise likely be would virtually impossible.30
27The strongly positive results GEOCON holdup evenifwe modify codingof thedefor the variable use a 0, 10,20, 25, 30, 40, 50, 60, 70, 75, or 80 percent pendent to threshold instead the of 50 percent default NTB andevenifwe makeNTB a continuous for variable instead a dummy of (and use OLS). be 281t should noted that, ModelsI-III, adding for for controls variables suchas thefollowing has no effect theestimates GEOCON (norare suchcontrols on for statistically significant themselves):(a) the1987number firms theindustry of in (U.S. BureauoftheCensus1998); (b) the1989 value of totalshipments theindustry by (U.S. Bureauof theCensus 1997); or (c) whether the industry's products be categorized finalor intermediate can as goods (Anderson 1996; Feenstra, Lipsey, Bowen1997,36-37). In addition, effect GEOCON is notconditioned industry and the of on size. Forinstance, we interact if to GEOCON (centered reduce with collinearity) SIZE inModel III, thecoefficient theinteraction is positive notsignificant of term but (one-tailed = 0.236). p 291n particular, andHerfindahl Gini indexes, wellas Krugman's as (1991,55-56) measure, all calculated usingbothstate- county-level yieldmostly and data, positive wholly but insignificant estimates ModelsII andIII (although fewof thesealternatives thesignificance in a cross threshold in Model I). 301n comparison, holding other all variables their at sample means, maximum the predicted increase in theprobability NTB due to TARIFF overits samplerangeis 81.8 percent; of due to

INDUSTRIAL LOCATION AND PROTECTION

1043

Thisresult all themore is striking given theevidence that on bearing geographic concentration beenso ambiguous date.In addition, has to given POLCON's very modest substantive effect, appears political it that geography notnearly importantsimple is as as economic geography the in politics ofprotection. The evidence bearing thecontrol on is variables also interesting. The strongly positive coefficient TARIFF(p < 0.01) indicates those on that industries already protected tariffs theones mostlikely receive are by to that NTBs,implying these measures complements. are INDCONhasa negativebutstatistically insignificant influence NTBs in all three on models. Likeso much theliterature, find market of we that share concentration has little bearing endogenous on sources protection. of Finally, ofthecomboth parative advantage IMPEXP and WAGEHOUR, variables, the carry predicted sign, eachis statistically and significant <-0.05) acrossall three (p models. Thoseindustries stand losemore that to from imports they than gain from exports, those and which employ lower-skill labor, theonesmost are likely receive to NTBsinthis sample U.S. manufacturing of conindustries, for of trolling theeffects political geographic and concentration.
4. IMPLICATIONS

The article beganbysetting competing out the predictions about relationship between industrial location import and barriers. question The is whether physical close proximity an industry helps secure protection inby its to creasing ability actcollectively whetherinstead or it the parochializes industry, squandering voteson a suboptimal number electoral of districts. Ourfindings reconcile these claims. both closecompeting Surprisingly, the group dispersed-group and hypotheses part thestory of get right, although not reasons would for they identify. The explanation as follows. is of studies endogenous First, protection shoulddisentangle from political economic if geography. Strikingly,we conflate twoconcepts regress the and NTBsononly studPOLCON,as prior ies do,POLCON takes a positive on coefficient remains and insignificant. when Only is included geographic concentration does separately POLCON's true reveal empirical significance itself. measures geographic of conSecond, centration account thespatial must for the Existrelationships among units. all fail ingmeasures, ofwhich todothis, results subyield insignificant when stituted GEOCON. This is whyprior for studies havetypically reported
-14.4 percent; toIMPEXP,59.5 percent we excludea single due WAGEHOUR, (if very highoutlier valueof that If variation from each variable's10th variable). we onlycount to percentile 90thpercentilevalues in thesample,thefigures GEOCON, 10.8%; TARIFF, 16.0%; WAGEHOUR, are -8.2%; andIMPEXP, 1.5%.

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MarcL. Buschand Eric Reinhardt

ambiguous findings geographic on concentration why results are and the here unusually powerful. How should findings political the for concentrationinterpreted? be We contend thedispersion that is hypothesis substantially correct. Mostindustries better with are off employment dispersed across many as electoral districts possible(whilemaintaining geographic as high Too concentration). much political concentration in results "converting saved"in Congress, the squandering industry's the voting power where is notneeded swaythe it to hearts minds elected and of officials (Magee,Brock, Young1989,97and 99). Thisjibes with so-called the "defense industry strategy," conwhereby tractors locate plants around country buyvotes support upcomthe to in of ingcontracts. twist The hereis that fewvery a largeindustries stand to benefit concentrating from infewer districts would optimal small than be for industries. Industries employing enormous an workforce dominate can the agenda their of elected representatives notdetracting their while from influencein other districts are than (sincethey larger a average), constituting winning coalition an effective player or veto (Snyder 1989).31 Yetthis mechanism works a handful extremely indusonly for of large tries. The surprising moregeneral and is implication that a having larger workforce reduces industry's an In influence. ourview, strongly this supports theOlsonian argument larger that groups havegreater difficulty colacting lectively. mayalso engender Size consumer opposition protection to (Caves 1976, 284;Salamon Siegfried and 1977,1032).Itcould ofcourse, an be, that industry grows largeprecisely becauseitis efficient competitive and and therefore desirous protection. not of However, industries larger disproportionately compete more than against imports they doubt on export, casting thisargument.32 Swaying votesin Congress therefore a matter is more of collective action solving than problems ofboastinglotofpotential per a votes se. In other how words, wella group abletoorganize, is rather itssheer than Howshould geographic the concentration be interpreted? beresult We lieve finding this constitutes unwavering for close-group support the hypothesis.Ofcourse, exact the mechanisms which by spatial proximity generates political influence only inferred ourevidence, can be from sincewe do not observe causalprocess only result the directly but the (i.e.,protection). We
3"McGillivray (1997,601-602) finds contrast large, in that politically dispersed industries exhibit more protection large, than concentrated Ourresults ones. maydiffer totheseparate due inclusion of geographic concentration. However, do notwishto maketoo muchof ourdifferences we with on McGillivray this sinceinboth point, cases theinteraction effect are findings tentative, driven byonlya handful industries noted of (as above). 32Seenote17.

size, is whatcounts.

INDUSTRIAL LOCATION AND PROTECTION

1045

effects, instrumental critical has concentration several geographic believe comenables face-to-face proximity closephysical For however. instance, a It exchange. provides of means information effective the munication, most and, of the that densesocialnetworks promote sharing knowledge basisfor 1985).Anditmaybolster (e.g.,Galaskiewicz action as a result, collective geoFor reasons, in of identity theprocess. these theformation a common in and workers managers different also concentration meansthat graphic of for costs transaction inorganizing thepurpose turning face plants lower efforts of able the vote. should be more tomonitor political thus outthe They is The undercontributors.result a in and industry to sanction others their The into preferences policy. empirical protectionist ability convert to greater which onlybe validated, can this supports argument, association find we problem. the moreover, correcting checkerboard by of concentration effects geographic the Ourclaimsabout instrumental to trade protection. little do with having of with resonate a variety studies of members among closeness that Forexample, (1973)argues physical Tilly and Mizruchi Koenig(1991) more likely. action a group makes collective that in the increases chance firms an that proximity demonstrate geographic And and contributions. Caldeira campaign will to industry cooperate make as as that Patterson (1987,968-969)establish a factor simple thephysical those members' politiincreases of seats proximitymembers' ina legislature for controlling initial and cal friendship thereby action-evenwhen joint interpretato lendsupport a close-group Such levelsoffriendship. studies of about GEOCON. tion this article's findings for alternative explanations the to we Nevertheless, areobliged consider and concentration protection. association between geographic demonstrated industries concentrated that for One couldargue, example, geographically be because receive they might lesscompetitive, disproportionately protection Or firms workers. onemight of and not of spatial proximitytheir because the rather the way itself that argue protection causesconcentration, than other The datain our is out Neither argument borne bytheevidence. around. are less industries not comconcentrated indicate geographically that sample strongly and suggest theory evidence More economic petitive.33 generally, on are concentrationcapitalizing econothat industries exhibiting geographic not trade them (Porter performers makes better, worse, miesofscale,which is concentration certainly 1990; Hanson 1998). And whilegeographic have a of size affected market (andhenceprotection),number studies by raise in not that demonstrated reductions, increases, protection geographic
dependence,or withIMPEXP, plain import correlated 33GEOCON is not significantly with (r WAGEHOUR = 0.30, r = -0.057, andr = -0.033, respectively, no p < 0.280; N = 363).

1046

MarcL. Buschand EricReinhardt

is why geographiHencethere no reason 1998).34 concentration Amiti (see greater protection. industries would ceteris paribus prefer callyconcentrated may factors is assets productive of competing explanation that Another (Shafer 1994, concentrated industries for be more specific geographically a be difgettinglocaljob may more 24). Forexample, 39-45;Moore1996, manufacworker a region in dominated a single for unemployed an by ficult on If assetspecificity, notGEOCON'seffect transaction and turer. so,then our Sincewe lacka collective couldexplain results. costsimpeding action, of we to reject algoodmeasure assetspecificity, areunable empirically this we this less theoretically ternative However, find argument interpretation. In than just hypothesis. particular, becausean compelling theclose-group it does is concentrated notmeanthat is theonly industry geographically of concentrated U.S. The gamein town.35 vastmajority geographically is in heartindustries centered thesamearea,theindustrial manufacturing have that Indeed, economists theorized through Ohio.36 landfrom Missouri localization substantially industrial to labormarket poolingcontributes assets more specific, geographic making (Krugman 1991,38-43).Farfrom factor which productive is one the concentration thus may increase easewith that toanother In this use. we hypothesis sense, submit theclose-group put between geoof relationship explanation theobserved provides better a and graphic concentration protection. industrial concentration. concerns implication ourfindings of Another an with important size Olson's(1971)group claim, industry fewer Following but is firms exhibit action hence, protection, this and, greater collective may and hygroup from different argument theclosegroup dispersed an entirely concentration proxy as a Theliterature toooften industrial has used potheses. the that for concentration, despite fact INDCONis and geographic political with nothighly correlated GEOCON andonlymoderately POLCON. with INDCON More ifwedonot include POLCONinour regressions, still, telling in a sign the of pitfalls inherent substituting becomes statistically significant, to are onefor other. the When variables concept inappropriateeachseparate with ina single industrial concentration washes consistent cluded out, model,
is does eliminate possibility the 34It true that study, a singlecross-section, notbyitself our as before 1990,possibly preceding notcaus(if that many these of NTBs wereinplace for longtime a they associated. are However, Krugman as (1991,60ing)thegeographic concentration which with in and and 63) argues, localization industry path-dependent "sticky," U.S. industries particuthe of is the of lar were, anything, concentrated if more during formation theseNTBs, notless (Kim 1995), which consistent ourexplanation, notthealternative. is with and of in but low is 35GEOCON'scorrelation thenumber firms an industry negative very (r = with little with concentration = (r exhibits relationship industrial -0.116, N = 453). GEOCON likewise 0.132,N= 443). con36 The national industry centroids thetopthird all industries of of sorted geographical by eachother. centration onlyan average 310 milesfrom are of

INDUSTRIAL LOCATION AND PROTECTON

1047

some prior studies (Caves1976, 286-287;Hansen 1990, 35-36).Apparently theproblem cooperation of among larger numbers firms dominated of is by the greater difficulty ofencouraging cooperation among physically dispersed actors-even many those if of actors tied oneora few are to firms. In addition shedding light an old debate, findings to new on our raise somenewquestions further for research. First, formation articulathe and tionof protectionist preferences among workers managers, and levelsof unionization, representation through associations, peak lobbying, voter and with inturnout wellvary may geographic concentration, offering telling sights thepolitical into activities industry respect trade of with to policy. While paper only atthese our can hint issues, points wayfor it the future research thepolitical on effects geographic of concentration. in with howdoesindustrial location affect Second, protectioncountries electoral systems differ thesingle-member that from districts characteristic oftheUnited States (McGillivray 1997;Rogowski 1997)?Recallthat electoral location. institutions reflect political only the component industrial of more. Ourfindings indicate economic that geography matters much Geoof graphic concentration be expected increase can to protection regardless for rules. others havefound someinitial electoral Indeed, support thishypothesis (Milner 1988,260). Comparative studies equipped with measures ofboth and invaluable inpolitical geographic concentration provide may sights alongtheselines.Particularly encouraging ourfinding geois that graphic concentration notbe measured need using very units analyfine of sis,sincestate-level produces data much sameanswer county-level the as thus be not data.Thosewith more limited data sub-national inhandshould bias. deterred concerns by about aggregation in will concentration ofindustryWestThird, theincreasing geographic ernEurope North and America trade the reshape politics among advanced industrial states (Rogowski 1997)?The newtrade theory suggests inthat more rereturns scale drive to international butincreasing creasing trade, is turns foster also concentration geographic (Krugman 1991).Thequestion thus whether will the further trade concentration offset gainsfrom greater be integration might that otherwise achieved. 5. CONCLUSION in Three on cast problems doubt thefindings reported theendogenous taken a as literature. concentrationwidely is protection First, geographic for two work proxy political concentration, although these variables hardly inlockstep. concentration Second, measures geographic of typically ignore thespatial the or and relationship among units (i.e., counties states) thus failto accountfortheproximity regions of hometo lumpy industries. in in concentration receives Third, thosefewstudies which political any

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MarcL. Buschand EricReinhardt

terms selare effects interaction and at direct attention all,nonmonotonic politics of group in despite their grounding theories interest domtested, We all and that more problems find geographically generally. correct three likely to are industries theonesmost but dispersed concentrated politically from industries benefit bevery receive from imports, although large relief the howto reconcile The thus reveals concentrated. article ingpolitically which protection around one of endogenous hypotheses twocompeting debates taken has shape. most theory's enduring
October13, 1998. Manuscript submitted 4, received January 1999. Final manuscript

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