CASCADING CONTINGENT PROTECTION

This paper extends the literature on the incentive effects of contingent protection by identifying and analyzing the vertical linkages that may exist across instances of contingent trade policy. It is shown that the accessibility of contingent protection in a downstream industry may provide additional inducement for upstream suppliers of intermediate inputs to pursue contingent protection as well. In general, access to instruments of contingent protection at more than one stage of the production stream enhances the opportunity for components producers to engage in indirect rent seeking. Contingent protection may be pursued precisely because of the likelihood of downstream injury and cascading protection.