Abstract
This paper modifies Grossman and Helpman's canonical "Protection for Sale" model by allowing demand linkages and oligopolistic competition. It shows that increased substitutability between products weakens interest groups' incentives to lobby. For the case of one organized and one unorganized industry, we obtain a particularly simple result: as product substitutability increases, the protection of the organized industry's product falls, whereas the protection of the unorganized sector's product increases. Empirical studies of the "Protection for Sale" model have suggested that the U.S. government's trade policy decisions are overwhelmingly determined by a concern for welfare maximization; the alternative interpretation of the paper is that the original model overstates the lobby groups' desire for protection.