Microfoundations of Influencing Public Opinion

Microfoundations of Influencing Public Opinion: Lobbying and Voting for Trade Policies

Public opinion, lobbying and elections have important effects on the formation of trade policy in democracies. This paper attempts to explain how lobbying expenditures can influence the outcome of an election fought over trade policy. Voters are assumed to own both capital and labour. The expenditures of lobby groups act as a signal to voters of the difference in returns to their factor endowments under different political parties.

Ⅰ. Introduction

Ⅱ. The Basic Model

Ⅲ. Implications

Ⅳ. Lobby Groups with Multiple Members

Ⅴ. Signals of a Factor Returns Possibility Curve

Ⅵ. Conclusions and Additional Caveats

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