Abstract:Recent empirical studies based on the protection for sale model show that the government puts a rather large weight on social welfare, which is in sharp contrast with the standard protection for sale model. This paper incorporates the“multiple principal multiple agent”model developed by Prat and Rustichini (2003) into the framework of Grossman and Helpman (1994), and investigates the effect of political organization on trade protection level, which successfully solves the above problem. Furthermore, the theoretic model shows that, as the size of government institutions increases, trade protection level will decrease because political contributions from the interest groups will then be allocated between more agents.