Trade. In: Oxford Handbook of International Political Economy, Jon Pevehouse & Leonard Seabrooke (eds.), Oxford University Press. 2021.
AbstractLarge and expanding flows of goods across borders are one of the core features of globalization. This chapter surveys the literature on the causes and effects of these trade flows. It examines first what drives these flows, next what moderates the costs and uncertainty firms face in making their export decisions, and lastly the self-perpetuating but inequality-creating impact of international trade. The chapter points out both existing connections and opportunities for further integration between the literatures in international political economy, economics, and comparative politics.
Constant Carbon Pricing Increases Support for Climate Action Compared to Ramping Up Costs Over Time (with Michael Bechtel and Kenneth Scheve). Nature Climate Change. 2020. (policy brief)
AbstractIntroducing policies that increase the price of carbon is central to limiting the adverse effects of global warming. Conventional wisdom holds that gradually raising the costs of climate action will maximize public support relative to other cost paths. Here we explore mass support for dynamic cost paths in four major economies (France, Germany, United Kingdom, and United States). We find that for a given level of average costs, increasing cost paths receive little support while a constant cost schedule is backed by majorities in all countries irrespective of whether those average costs are low or high. Experimental evidence indicates that constant cost paths significantly reduce opposition to climate action relative to increasing cost paths. Preferences for climate cost paths are related to individuals’ time horizons and the desire to smooth consumption over time.
Ratification Politics and Preferential Trade Agreements: Malaysia and the CPTPP (with Nikhar Gaikwad and Kenneth Scheve). Stanford Business School Case Study. 2019.
AbstractWhat does the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) mean for a country like Malaysia? This case investigates the far-reaching domestic ramifications of this type of “mega-regional agreement,” as well as how international agreements can be an important way to strengthen alliances and global standing. The case asks students to evaluate an important decision facing Prime Minister Mahathir Mohamad, a long-serving former prime minister who surprised everyone by winning Malaysia’s May 2018 election. Having come out of retirement to secure his legacy, Mahathir faces a complicated political choice. The previous administration had signed on to the CPTPP, and signatory countries must now pass the deal through their respective domestic approval processes. But Mahathir’s party and government are divided on the deal, which could bring new export and investment opportunities – but also would require Malaysia to make commitments to protect labor rights and intellectual property. These commitments, in turn, could prove politically unpopular at home. The case study asks students to advise on a decision that could alter Malaysia’s economic and political position in the world – should Malaysia ratify the CPTPP as it currently stands? Should Malaysia try to draw the United States back into this regional trade agreement, or push for China’s participation. Is there a way to renegotiate the deal to keep Malaysian businesses happy, but also address concerns by farmers, environmental groups, and human rights activists?
Is There a Future for Multilateral Trade Agreements? (with Judith Goldstein). In: Handbook of Global Trade Policy, Andreas Klasen (ed.), Wiley Blackwell. 2019.
AbstractThis chapter examines the World Trade Organization (WTO), its history and its relevancy today to our understanding of trade agreements. It examines the central norms of the system and compares trade liberalisation under the multilateral WTO with the more exclusive regional and/or preferential trade agreements. The chapter first addresses the political consequences of General Agreement on Tariffs and Trade/WTO membership, focusing both on the rules and norms of the regime and on the explanation for why they have become less functional over time. It then looks at its legislative success and compares that with agreements that have existed simultaneously, but have limited membership. The chapter also looks at the effectiveness of the WTO as a forum for dispute settlement. It further presents some general thoughts on the impact of a rise in populism and other stumbling blocks the WTO faces.
AbstractCountries routinely implement policy barriers that make it harder for foreign investors to set up operations within their market, in order to capture rents or protect particular constituencies. However, doing so imposes negative externalities on foreign rms and their home countries, as they miss out on potential prots from the investments. The result is an international cooperation problem akin to the situation created by trade barriers. This paper examines the international politics of investment protectionism, asking when and how countries cooperate to reduce investment barriers. In practice, cooperative investment liberalization has generally taken place through preferential trade agreements (PTAs). I argue that PTAs oer two advantages as a forum for negotiations: their preferential nature and their inclusion of a wide range of policy areas. I provide evidence for these arguments based on the creation and content of recent bilateral investment and preferential trade agreements as well as a historical analysis of attempts at investment cooperation. This paper has implications for the literature on the international politics of investment, advocating for a focus on market access rather than expropriation as a major concern for states, and on the design of international cooperation, showing that bundled agreements allow states to coordinate their commitments.
AbstractThe multilateral trading system is founded on norms of non-discrimination, and accordingly it imposes limits on the creation of preferential trade agreements (PTAs). Yet hundrerds of PTAs have been signed in recent decades, despite the requirements that such deals liberalize “substantially all” trade. I argue that states have overcome the costs imposed by this high bar through use delays on the implementation of their tariff removals. Phased-in concessions mean that some of the costs of liberalization accrue at some point in the future, which current governments are less concerned about, while many benefits of PTA creation can be reaped in the shorter term. I show evidence for this argument using over half a million product-level tariff observations, demonstrating that governments vary the delays they impose to target goods where protection is high and where their negotiating partner is particularly competitive. These findings suggest that a small amount of flexibility in the rules surrounding PTAs was sufficient for states to find a way to make such arrangements more attractive, offering a re-interpretation of the relationship between multilateral and preferential trade cooperation.
AbstractWhen it comes to the role of interest groups in the formation of trade policy, the literature generally thinks of import-competing sectors as particularistic actors in search of protection for their industry. Exporting firms, meanwhile, can be relied upon to even the scales of interest group pressure and push in favor of reciprocal trade liberalization. Extensive empirical evidence shows that exporters are indeed active in ensuring the ratification of trade agreements. Yet exporters are not generically benefitted by all trade liberalization abroad; they are particularly interested in market access in the products they are seeking to export. I argue that during the negotiating phase of trade cooperation, we should expect exporting firms to ask their governments to pursue specifically those concessions from the agreement partner that are valuable to the exporter themselves. Using data on tariff concessions in preferential trade agreements, I show that countries are more likely to grant liberalization if the exporters in the negotiating partner are more politically powerful, when controlling for features of both the product and the partner country. This work contributes to a growing literature on the centrality of exporters in trade liberalization by pointing to the importance of incorporating exporters at not just the ratification but also negotiation stage. The findings also imply that the political structures of trade policy-making may further reinforce the firm concentration effects of liberalization.
What Determines Climate Policy Preferences if Reducing Greenhouse-Gas Emissions is a Public Good? (with Michael Bechtel and Kenneth Scheve)
AbstractA wide variety of international policy problems, including climate change, have been characterized as global public goods. This paper adopts this theoretical framework to identify the baseline determinants of public opinion about reducing greenhousegas emissions. We show formally that this model implies that support for climate action will be increasing in future benefits, their timing, and the probability that a given country’s contribution will be decisive while decreasing in expected costs. Utilizing novel data from original surveys in France, Germany, the United Kingdom, and the United States, we provide experimental and observational evidence that expected benefits, costs, and the probability of successful provision are critical for explaining variation in support for climate action. Surprisingly, we find no evidence that the temporality of policy benefits shapes support for climate action. These results suggest effective strategies for building public support for climate action and designing institutions that facilitate global public goods provision.
All About the Money? Regulatory Provisions and Trade Preferences (with Rebecca Perlman)