Incidental Representation: Big Retail, Consumers, and Trade Liberalization

• In Event: Domestic Politics and Trade

Abstract

How do weak interests get represented in politics? Producers seeking protection from import competition have the incentive and capability to lobby for favorable economic policy. Consumers, the beneficiaries of free trade, are the archetypal weak interest, being too dispersed and numerous to organize collectively. But trade barriers on consumer goods have nevertheless tumbled in recent decades, ushering in an era of unprecedented variety and low prices, at the expense of import-competing manufacturers. We offer a novel explanation for this puzzle. We argue that the retail sector’s transformation from one comprised of many small establishments to a sector dominated by behemoths created a powerful, concentrated interest that profited from cheaper imports, leading to the incidental representation of dispersed consumers in trade policy. We draw on qualitative findings, cross-national data on trade flows, and Congressional voting on US participation in free trade agreements to provide evidence in support of our theory.

Author

• Gautam Nair, Harvard University