Representation and Delegation in Trade Policymaking: The Political Economy of Trade Taxes in Argentina

Abstract

The literature typically argues that legislative influence on trade policy is scant and reactive because trade policymaking power is largely delegated to the executive. Bridging the literatures on political economy and legislative politics, we analyze legislative activity on trade taxes in a setting in which delegated powers reverted to the legislature after decades under executive jurisdiction: the Argentine Chamber of Deputies. Our findings reveal that delegation is the prevailing strategy, legislators intervene prompted by economic shocks, and the contents of their initiatives are contingent to the effects of shocks on local economies. When appreciation rages or devaluation is insufficient, legislators representing export-oriented economies submit liberalizing bills, and those representing inward-oriented economies submit protectionist initiatives. Otherwise, delegation remains the norm and legislators strategically employ declarative bills to signal their preferred policies.