Votes, Vetoes, and the Political Economy of International Trade Agreements

Votes, Vetoes, and the Political Economy of International Trade Agreements

Votes, Vetoes, and the Political Economy of International Trade Agreements

Votes, Vetoes, and the Political Economy of International Trade Agreements

Synopsis

Preferential trading arrangements (PTAs) play an increasingly prominent role in the global political economy, two notable examples being the European Union and the North American Free Trade Agreement. These agreements foster economic integration among member states by enhancing their access to one another's markets. Yet despite the importance of PTAs to international trade and world politics, until now little attention has been focused on why governments choose to join them and how governments design them. This book offers valuable new insights into the political economy of PTA formation. Many economists have argued that the roots of these agreements lie in the promise they hold for improving the welfare of member states. Others have posited that trade agreements are a response to global political conditions. Edward Mansfield and Helen Milner argue that domestic politics provide a crucial impetus to the decision by governments to enter trade pacts. Drawing on this argument, they explain why democracies are more likely to enter PTAs than nondemocratic regimes, and why as the number of veto players--interest groups with the power to block policy change--increases in a prospective member state, the likelihood of the state entering a trade agreement is reduced. The book provides a novel view of the political foundations of trade agreements.

Excerpt

Since the conclusion of World War II, there has been a proliferation of international trade agreements. Social scientists have expressed substantial interest in the sources of this development. Many economists have argued that the roots of these agreements lie in the promise they hold for improving the welfare of signatories. Other researchers posit that trade agreements are a response to global political conditions. The role of domestic politics, however, has received short shrift in the literature on this topic. In this book, we argue that domestic politics provides a crucial impetus to the decision by governments to enter trade pacts. Of particular importance in this regard are the regime type and the number of “veto players” that exist in each country. Democracies are especially likely to enter trade agreements, and such agreements become increasingly unlikely as the number of “veto players” within prospective members increases, for reasons that we explain in the coming pages.

This book has been a long time in the making. In the 1990s, we had been working separately on the domestic sources of international cooperation (Milner 1997; Milner and Rosendorff 1996 and 1997) and the political economy of regionalism and preferential trade agreements (PTAs) (Mansfield 1993 and 1998). We joined forces in an effort to analyze how domestic politics affects cooperation on international trade. In the many years spent working on this topic, we have accumulated a large number of debts, but we are particularly grateful to two individuals. Some of our initial work on the political economy of trade was conducted with B. Peter Rosendorff (Mansfield, Milner, and Rosendorff 2000 and 2002). Later we wrote a set of papers covering some of the issues addressed in this book with Jon Pevehouse (Mansfield, Milner, and Pevehouse 2007 and 2008). Both Peter and Jon are wonderful collaborators, enormously talented researchers, and good friends. We are grateful for their many contributions to this book.

We also owe a large debt of gratitude to a remarkable group of individuals who helped us conduct the research included in this study. Raymond Hicks worked tirelessly to compile the database of PTA ratification dates that we use. He, David Francis, and Rumi Morishima also helped us to conduct much of the data analysis in this book. More recently, Torben Behmer and Sarah Salwen helped us to edit the book manuscript, and Jason McMann provided research assistance. We thank all of them profusely.

We are also indebted to a large number of scholars who commented on all or parts of this book. In September 2009, we held a book conference at which Joanne Gowa, Robert Keohane, Lisa Martin, Ronald Rogowski, Peter Rosendorff, Kenneth Scheve, Jack Snyder, and Michael Tomz gave us many excellent comments and suggestions. Indeed, they furnished us with so many that it took . . .

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