英文摘要 |
This paper incorporates the political contribution and lobbying activities of interest groups into governments’ decisions on privatization and tariff polices. Under this condition of government failure, we re-examine the optimal privatization and tariff policy, as well as their impact on social welfare. First, it is found that the optimal level of privatization will be higher and tariff will be lower (or even subsidy in some cases) whenever lobbying exists. Second, the domestic welfare will be higher under political contribution than that without, and produces Pareto improvement for both countries. Moreover, to extend the situation of trading countries with or without a Free Trade Agreement, we find that the changing direction of aggregate welfare depends on the efficiency of lobbying. Finally, the equivalence between privatization and tariff policies of Wang and Chiou (2015) will not hold under our framework. |