Recall the anti-trade bias puzzle, highlighted in Dani Rodrik’s influential 1995 survey of the political economy of trade policy:

Current models treat trade policy as a redistributive tool, but do not explain why it emerges in political equilibrium in preference over more direct policy instruments. Further, existing models do not generate a bias against trade, implying that pro-trade interventions are as likely as trade-restricting interventions.

In a working paper (pdf) on the political economy of multilateral trade agreements, Wilfred Ethier of UPenn writes:

[T]he Anti-Trade-Bias Puzzle has been widely recognized. But it has not been successfully addressed. Papers typically either ignore the problem or eliminate it by arbitrarily constraining the ability of the government to adopt export-promotion policies.

Perhaps many authors “ignore the problem or eliminate it” by assumption, but there has been some interesting scholarship in the last few years that addresses the topic. I’ve seen at least five hypotheses spelled out at length which produce anti-trade bias effects:

(1) The government’s objective function includes a desire to reduce inequality.
(2) Governments are revenue constrained.
(3) Individuals are loss averse.
(4) Prior entrants have sunk costs in a shrinking industry.
(5) General equilibrium models don’t produce the bias.

Inequality (Nuno Limao & Arvind Panagariya):

In this paper, we show that if the government’s objective reflects a concern for inequality then trade policy generally exhibits an anti-trade bias. Importantly, under neutral assumptions, the mechanism that we analyze generates the anti-trade bias independently of whether factors are specific or mobile across sectors.

Revenue constraints (Paul Pecorino):

In this paper, the Grossman and Helpman (1994) “Protection for Sale” model is
extended by adding exogenous government expenditure. This expenditure may be financed via a
combination of tariff revenue and a distorting income tax. In addition to the exogenous
expenditure, export subsidies need to be financed either via tariff revenue or a distorting wage
tax. With this addition to the model, plausible values of the model’s parameters yield import
protection bias.

Loss aversion (Patricia Tovar):

[W]e show that if individual preferences exhibit loss aversion and the coefficient of loss aversion is large enough, there will be an anti-trade bias in trade policy. We also show that, for a sufficiently high coefficient of loss aversion, more import-competing lobbies will form than under the current leading political economy model of trade protection due to Grossman and Helpman (1994), and import-competing sectors will be more likely to form a lobby than export sectors, reinforcing the anti-trade bias result. The predictions for protection that we obtain also imply that, everything else equal, higher protection will be given to those sectors in which profitability is declining. We use a nonlinear regression procedure to directly estimate the parameters of the model and test the empirical validity of its predictions. We find empirical support for the model and, very importantly, we obtain estimates of the parameters that are very close to those estimated by Kahneman and Tversky (1992) using experimental data.

Costs of entry (Richard Baldwin & Frederic Robert-Nicoud):

Governments frequently intervene to support domestic industries, but a surprising amount of this support goes to ailing sectors. We explain this with a lobbying model that allows for entry and sunk costs. Specifically, policy is influenced by pressure groups that incur lobbying expenses to create rents. In expanding industry, entry tends to erode such rents, but in declining industries, sunk costs rule out entry as long as the rents are not too high. This asymmetric appropriablity of rents means losers lobby harder. Thus it is not that government policy picks losers, it is that losers pick government policy.

General equilibrium (Nuno Limao & Arvind Panagariya):

We demonstrate that if we replace the almost partial equilibrium model with a general equilibrium model in the Grossman-Helpman political economy model, anti-trade bias may emerge even if we assume symmetric technologies, endowments and preferences across sectors provided that the elasticity of substitution in production exceeds unity. In addition, we show that ceteris paribus, in general equilibrium, increases in the imports-to-GDP ratio lower the endogenously chosen tariff and the production share of the import sector in GDP has an ambiguous effect.

Economists have produced a number of hypotheses to explain anti-trade policies. But I doubt that we will be able to easily test these competing explanations. Are there other hypotheses? Bryan Caplan might suggest public opinion.