Interests, Institutions, and Ideology in the Republican Conversion to Trade Liberalization, 1934-1945

This paper investigates the factors explaining significant policy change by studying how bipartisan support developed to sustain the Reciprocal Trade Agreements Act (RTAA) of 1934. The RTAA fundamentally transformed both the process and outcome of U.S. trade policy: Congress delegated its authority over tariff-setting to the president sharply toward trade liberalization. The durability of this change was achieved only when the Republicans, long-time supporters of high tariffs who originally vowed to repeal the RTAA, began to support this Democratic initiative in the 1940s. In seeking to explain this conversion, we find little evidence of an ideological shift among Republicans, but rather an increased sensitivity to export interests for which the institutional structure of the RTAA itself may have been responsible. Our results suggest that analyzing changes in both institutional incentives and economic interests are important for understanding lasting change in economic policy.