The Limits of Protectionism: Building Coalitions for Free Trade. By Michael Lusztig. Pittsburgh, PA: Pittsburgh University Press, 2004. 288p.

John A. C. Conybeare, University of Iowa

Abstract

This is an ambitious and useful book that takes the reader through eight cases of governments that tried, with mixed results, to guide their countries from protectionism to free trade. A successful strategy requires the government to make allies of the industries that can transform themselves and survive in a more competitive environment ("flexible rent-seekers") and quickly to kill the industries that cannot ("inflexible rent-seekers"). Michael Lusztig adopts from the classic public choice literature the term rent-seekers, a group that seeks to effect a zero sum transfer from others to itself, usually resulting in a negative sum game for society, by the amount of the transaction costs necessary to effect the transfer.