ABSTRACT
The chapter explains the varying levels of protection across industries by focusing on factors that affect both the supply of and demand for the regulation of trade. Both circumstances that lead industries to request protection, and factors that affect the government's decision of whether or not to supply that protection have been examined. A major problem of the literature on both the International Trade Commission (ITC) and the regulation of trade in general has been a failure of scholars to account for both the supply and the demand sides of the regulatory issue. The problem of self-selection is dealt with by modeling ITC outcomes with a nested structure (the nested logit model) where the final outcome depends on both industry choice and agency choice. The industries (demanders) face the binary choice of whether or not to undergo the costs of applying and pressuring the regulators for trade protection.
