The aim of this work is to provide an empirical estimate of the welfare effects of the protection policy established for the benefit of the Spanish coal mining industry. To that end and using a partial equilibrium approach, we compute the allocative efficiency distorsions, as well as the potencial welfare loss associated with rent-seeking behaviour and the labour adjustment costs. Although coal policy is analyzed from the 1970s, the empirical computation focuses on the period 1989-1995. The results show that protection generates important welfare costs due to allocative distorsions, even in the most efficient part of the sector, while the rent-seeking costs are less weighty. The direct labour adjustment costs are subtantial, but do not stand out because of the magnitude of the social cost of protection.

Key words: protectionism, industrial policy, industrial adjustment, rent seeking, coal in Spain.
JEL classification: F13, L52, L71.