James E.Alt and Michael Gilligan 335include the specific factor in the export (import-competing) industry. But where
will the mobile factor, labor, be allied?
... [W]here the export industry is labor-intensive and labor consumes relatively
much of (spends a disproportionate share of its consumption budget on) the imported
good, labor has an interest in liberalization; so too, naturally, does the owner of
the specific factor in the export industry. Set against this pro-liberalization coalition
is the specific factor in the import-competing industry alone. Change the relative
labor intensities of the two industries, and switch labor’s consumption of imports
to “relatively low,” and we move to [a situation where] the owners of the export
industry’s specific factor stand alone in wanting liberalization, other things equal....
The underlying logic is simply this: the factor that is politically advantaged is
that which is specific to the good that uses labor intensely, labor does not
disproportionately consume that as well.
But what if the direct effect of relative price changes on the mobile factor is
ambiguous? Even then, each of the two specific factors may want to pull the
mobile factor into its coalition. To do so, they may be willing to offer side payments
to labor to bring it into their coalition. In these cases, which coalition labor allies
with (or at least is bought by more cheaply) will depend on whether the effects of
the consumption bundle or of factor intensity are stronger.
FIGURE 1. Trade Policy Coalitions under the Stolper-Samuelson and Ricardo-Viner
Assumptions