| This thesis comprises of three essays which look at issues in political economy and trade policy formulation. The first essay analyzes policy formation in a situation where firms with different preferences lobby the government for tariffs. We examine how the government's responsiveness determines the fragmentation of a lobby and, in turn, how fragmentation of the lobby affects the equilibrium tariff. We find that if the government is not very responsive to interest groups, the firms are able to overcome their differences and lobby cooperatively, and vice versa. We also find that a fragmented lobby makes higher net contributions to the government and yet, under certain circumstances, obtains a lower level of protection than would a unified lobby.;In the second essay, we show that in certain political situations gradual reforms might be preferable to an immediate reduction in all tariffs, even though the latter are better on purely economic grounds. This might occur when a reduction in tariffs across the board might make all groups in the economy better off, yet each group would be interested in blocking specific tariff reduction, detrimental to itself. In the absence of a powerful political or legal institution that can ensure that specific reforms are not blocked, no group would be willing to commit to its side of the tariff reforms unless others have already done so. We show that this deadlock may be broken by a gradual reform, where each group completes a part of the reform, and proceeds to the next step after verifying that the other groups have fulfilled their commitments.;The third essay looks at in-house research and development (R&D) spending and technology imports in India during the eighties. We examine the relationship between the two and study their impact on output. Our results show that R&D and technology imports have had a significant effect on improving productivity, and that local R&D and technology imports were, on an average, substitutes. Finally, our results indicate that the 80's saw some growth in total factor productivity (TFP) attributable to an increase in knowledge capital; however, we find that TFP growth due to exogenous causes was negative during this period. |
