the political economy of trade institutions of protection d omestic support for a liberal commercial policy in the u s rests on a commonly accepted set of rules and norms these rules and norms best characterized as a defense of free and fair trade arise from two different traditions the first originated as a political reaction to high trade barriers preceding the great depression central decision makers took as a lesson from the depression period that short term political forces should not determine the level of state intervention into the market the second to protect against unfair trade emanates from a long history of state support for industries that claim foreign producers are pursuing unfair predatory practices established in statute before the depression these rules did not fundamentally change in the postwar period together these decision rules are used to interpret american trade protectionism

ten little treasures of game theory and ten intuitive contradictions this paper reports laboratory data for games that are played only once these games span the standard categories static and dynamic games with complete and incomplete information for each game the treasure is a treatment in which behavior conforms nicely to predictions of the nash equilibrium or relevant refinement in each case however a change in the payoff structure produces a large inconsistency between theoretical predictions and observed behavior these contradictions are generally consistent with simple intuition based on the interaction of payoff asymmetries and noisy introspection about others decisions

minding america s business the decline and rise of the american economy only the economy s competitive position internationally but also the nation s moral fiber in the liberal camp the present confusion which has arisen out of attempts to reconcile reagan s new federalism with longstanding democratic demands for a large share of public goods in the economy has been camouflaged by the visions of felix rohatyn and lester thurow who want to rebuild america s in

understanding the nature of cooperation variability abstract our paper investigates framing effects in a large scale public good experiment we measure indicators of explanations previously proposed in the literature which when combined with the large sample enable us to estimate a structural model of framing effects the model captures potential causal effects and the heterogeneity of cooperation behavior we find that framing only has a small effect on the average level of cooperation but a substantial effect on behavioral heterogeneity explained almost exclusively by a corresponding change in the heterogeneity of beliefs about other subjects behavior the impact of changes in preferences and game form misperception is on the other hand negligible

the two faces of capital corporations and individual capitalists as political actors widespread access to public records of campaign contributions by corporate political action committees pacs have made these the preferred data for analyzing political partisanship within the capitalist class by comparison data on political contributions by individual capitalists were until recently difficult to obtain and rarely subjected to systematic study important differences are demonstrated between these two forms of capitalist political action by directly comparing the campaign contributions of 592 individual capitalists with the contributions of the 394 major corporations with which those capitalists were associated campaign contributions by individual capitalists follow a logic different from that of corporate pacs corporations are generally more interested in buying influence with incumbents while individual capitalists are more concerned with bolstering the election prospects offavored candidates by providing a more direct measure of capitalists political preferences the analysis of campaign contributions by individual capitalists clarifies theoretical questions that remain unresolved in the research based on corporate pacs variables that elude measurement when corporations are the units of analysis e g ethnicity are shown to have important consequences for capitalist political partisanship

framing effects in public goods prospect theory and experimental evidence this paper studies both theoretically and experimentally frame effects in the context of a public good game in which players have to make a costly contribution either i to achieve or ii not to lose a non excludable monetary prize our protocol leads to public good provision not deterioration only if a certain contribution level is achieved since both frames differ with respect to the reference point we use prospect theory to derive testable predictions in particular prospect theory predicts more contribution in the second frame our evidence suggests that a subjects behavior is highly sensitive to frames and b the theoretical prediction is confirmed except when the threshold is low we also estimate the parameters which better suit our experimental evidence partly confirming previous results in the literature

is the growth of regionalism as significant as the headlines suggest lessons from agricultural trade the proliferation of regional trade agreements rtas has motivated a significant number of ex post econometric studies investigating their agricultural trade impacts the general conclusion is that rtas increase members trade by as much as 150 on average in this article we demonstrate that previous empirical work likely misrepresents the impact of rtas because of considerable heterogeneity in the depth of economic integration pursued by these agreements contrary to previous studies the results reveal that rtas are not universally trade creating and some agreements appear to provide very little benefit deep integration agreements on the other hand are largely responsible for the impressive agricultural trade flow increases reported in the literature testing the hierarchy of rtas largely confirms the theory the benefits of regionalism are an increasing function of the depth of economic integration

economists capitalists and the making of globalization north american free trade in comparative historical perspective why did globalization happen current explanations point to a variety of conditions under which states have made the free market policy changes driving international economic integration since the 1980s such accounts disagree however about the key actors involved this article provides a reconciliation showing how two different combinations of actors and two different political economic pathways have led to globalization in recent decades in developed countries mobilization by business has been central elsewhere technocrats both constrained and empowered by international finance have pursued globalization more independently of business in both contexts economists technical authority has helped legitimate liberalization despite the limited diffusion of their ideas the article validates and elaborates this model using a comparative historical study of how the united states canada and mexico proposed negotiated and ratified agreements for free trade in north america

corporate unity in american trade policy a network analysis of corporate dyad political action this essay examines factors that produce political unity among large u s corporations advocating free trade expanding on old debates these data and analyses validate the importance of organizational and class cohesion approaches to corporate political action methodologically the political unity of pairs dyads of firms in trade policy activism is analyzed with quadratic assignment procedure regression shared membership in prominent policy networks and board interlocks positively predict corporate political unity across three areas of trade policy influence from the executive branch to the legislature non network organizational indicators also significantly predicted corporate trade policy activism the findings support business unity accounts of corporate political action and suggest that higher levels of firm embeddedness within intercorporate networks facilitate collective corporate political action

are preferential trading arrangements trade liberalizing or protectionist preferential trade arrangements and especially free trade agreements have mushroomed in importance in the 1990s this has revived research on the effects of these arrangements both on the welfare of the member countries and those excluded and on the momentum for further liberalization of the open multilateral trading system this paper reviews the analyses and evidence to date as to these effects showing that analytically anything can happen and that to date there has been insufficient experience to draw conclusions from empirical evidence

resisting the protectionist temptation industry and the making of trade policy in france and the united states during the 1970s why were advanced industrial states able to keep their economies relatively open to foreign trade in the 1970s and the early 1980s despite declining u s hegemony and increasing economic difficulties this article argues that an international level change affected domestic trade politics and contributed to the maintenance of a liberal trading system examining the united states and france the argument proceeds in two steps showing first how domestic trade politics were changed and second how this change affected the policy process initially i argue that aspects of the increased international economic interdependence of the postwar period altered domestic trade politics by creating new anti protectionist preferences among certain firms firms with extensive international ties through exports multinational production and global intra firm trade have come to oppose protectionism since it is very costly for them evidence for these new preferences was apparent among both american and french industries despite different contexts firms in the two countries reacted similarly to the growth of interdependence next i ask whether firms preferences affected trade policy outcomes and show how these preferences were integrated into the policy process in both countries trade policy structures in neither country prevented firms preferences from affecting the policies adopted even in france a so called strong state firms preferences were a key influence on policy in the trade policy area then the french and american states did not appear to differ greatly in their susceptibility to industry influence even though their policy processes were different

corporate mobilization and political power the transformation of u s economic policy in the 1970s despite their otherwise divergent arguments pluralist state centered and neo marxist relative autonomy conceptions of political power in capitalist societies share the view that the capitalist class is generally incapable of unified political action yet a striking feature of policy struggles in the united states between 1974 and 1981 was the dominant influence of a well organized and unified business lobby i examine business unity and political influence in the context of recent u s policy history tracing the legislative histories of the unsuccessful labor law reform and consumer protection agency bills of the 1 970s and the successful economic recovery tax act of 1981 a class based corporate power structure perspective is supported the historical conditionsfostering the political mobilization and intraclass cohesion of business in the 1970s and the theoretical implications of the breakdown of business unity after 1981 are also examined

the epidemiology of corporate pac formation 1975 1984 abstract most work on corporate political action committees pacs accounts for their formation or activity level in terms of market concentration and collective action dilemmas subsidiary concerns include the effects of regulatory burden and the firm s internal organization however these cross sectional designs yield little insight into the dynamics of the process results of logit and event history analyses of panel data on 119 u s firms from 1975 1984 show that changes in corporate profitability pac formation by other firms in a firm s board of directors interlock network and the degree of managerial dominance of corporate governance also affect the likelihood that a firm will form a pac analyses also reveal important differences in pac formation dynamics across different types of firms particularly in their response to pac formation by linked firms

experimental evidence of a sunk cost paradox a study of pricing behavior in bertrand edgeworth duopoly a well known implication of microeconomic theory is that sunk costs should have no effect on decision making we test this hypothesis with a human subjects experiment students recruited from graduate business courses with an average of over six years of work experience played the role of firms in a repeated price setting duopoly game in which both firms had identical capacity constraints and costs including a sunk cost that varied across experimental sessions over six different values we find contrary to the prediction of microeconomic theory that subjects pricing decisions show sizable differences across treatments the effect of the sunk cost is non monotonic as it increases from low to medium levels average prices decrease but as it increases from medium to high levels average prices increase these effects are not apparent initially but develop quickly and persist throughout the game cachon and camerer s 1996 loss avoidance is consistent with both effects while cost based pricing predicts only the latter effect and is inconsistent with the former

gaining access by doing good the effect of sociopolitical reputation on firm participation in public policy making this paper examines the role of firms sociopolitical reputations as proxied by their perceived engagement in socially responsible practices in public policy makers decisions to grant access in the policy making process i argue that policy makers dependencies motivations and decision making processes lead them to evaluate firms by using sociopolitical reputation as a differentiating heuristic i hypothesize that firms that construct stronger sociopolitical reputations will be granted greater access and that firms existing political activity and policy makers partisanship will moderate this relationship i test these hypotheses using an 11 year panel on congressional testimony reputation and political and financial characteristics for the s p 500 and find support for all three these findings support the existence of a sociopolitical dimension to firms reputations that affects how public policy makers evaluate firms demonstrating that corporate social responsibility pays political benefits this paper was accepted by jesper sorensen organizations

defense against recession u s business mobilization 1950 19701 the unexpected investment decisions of companies during recessions often frustrate commentators and policy makers who view the economy from the top down companies may act against immediate market signals during recessions because of uncertainties about strategy and the future direction of the economy a mesolevel sociological model of how firms interpret and respond to economic conditions in uncertain times improves understanding of firms variable responses to recessions which cumulatively shape macroeconomic trajectories examining firm level employment during four recessions from 1950 to 1970 the author generates results from dynamic panel models to show that firms set their employment levels against profits and market share and in alignment with peers and political affiliations firms manage uncertainty by imitating peers but also by endeavoring to construct their environment collectively through business associations this article s counterintuitive economic findings and the evidence of social and

firms and tariff regime change explaining the demand for protection although it is commonly argued that there is a connection between tariff levels and business conditions this hypothesis has not been subjected to systematic empirical analysis or given any theoretical basis the author presents two complementary theories of the movement of tariff levels in response to changing business conditions both explain tariff changes in terms of the changing political demands of business firms and both rely on the business cycle to drive these changing demands one theory is a conventional argument about changing opportunities for entry and exit the other treats firms as satisficers the theories yield similar predictions preliminary empirical analysis while consistent with both does not differentiate between them

testing theories of regime change hegemonic decline or surplus capacity two theories explain changes in the international regimes for major economic sectors a theory of hegemonic stability explains sectoral change as a consequence of ebbing hegemony a theory of surplus capacity attributes regime shifts to a serious global problem with excess production capacity in the sector the history of the world automobile industry shows that surplus capacity offers the better prediction and explanation for the timing of regime changes however a synthesis of the two theories is even more satisfactory hegemonic decline is a necessary but not sufficient condition for change surplus capacity in the absence of a hegemon creates the conditions necessary for change

side payments versus security cards domestic bargaining tactics in international economic negotiations the literature on international economic cooperation has devoted relatively little attention to domestic bargaining tactics and their determinants recent scholarship has tended to stress the utility and frequency of side payments while discounting other prominent bargaining tactics and a broader understanding of tactical choice this article argues that policymakers choose among domestic bargaining tactics to garner support when faced with situations in which other government officials or societal interest groups block the ratification of international economic agreements focusing on offers of side payments and attempts at issue redefinition the article s findings suggest that differences in domestic resistance to proposals of material compensation and in external security threat may explain choices between those tactics in domestic bargaining

do south south trade agreements increase trade commodity level evidence from comesa south south trade agreements are proliferating yet the impact of these agreements is largely unknown as existing north north and north south micro level studies are likely to yield misleading predictions for south south trade agreements this paper estimates the impact of comesa on uganda s imports between 1994 and 2003 detailed import and tariff data at the 6 digit harmonized system level are used for more than 1 000 commodities based on a difference in difference estimation strategy the paper finds that in contrast to evidence from aggregate statistics comesa s preferential tariff liberalization has not considerably increased uganda s trade with member countries on average across sectors the effect however is heterogeneous across sectors finally the paper finds no evidence of trade diversion effects resultats au niveau des biens pour le comesa les accords commerciaux sud sud proliferent or l impact de ces accords reste largement inconnu car les micro etudes des accords nord nord et nord sud sont susceptibles de mener a des previsions trompeuses quand il s agit d accords sud sud ce texte evalue l impact de comesa sur les importations de l ouganda entre 1994 et 2003 on utilise des donnees detaillees sur les tarifs et les importations au niveau des codes a six chiffres pour plus de 1000 biens a l aide d un modele d ecart dans les differences on decouvre que contrairement a ce que suggerent les statistiques agregees la liberalisation des tarifs preferentiels de comesa n a pas accru considerablement le commerce avec les pays membres en moyenne dans tous les secteurs l effet est different selon les secteurs de plus il appert qu il n y a pas eu diversion du commerce

does the organization of capital matter employers and active labor market policy at the national and firm levels does the organization of business matter for social policy development in the advanced capitalist democracies conventional welfare state analysis has given this significant question scant attention we argue however that the representational power of business coordination across business interest units and integration of associations in corporatist policy making forums or what we call the social corporatist organization of business should result in greater support and participation by employers in social policy formation and implementation we test our arguments with models both of 1980 98 pooled time series data on withinand across country variation in spending on active labor market programs and of extensive firm level survey data from denmark and the united kingdom we find that the centralization and coordination of employers as well as the integration of employer organizations in corporatist policy making forums are strongly associated with shares of national income devoted to active labor market policy we find moreover that the degree of employer organization conditions active labor market policy responses to de industrialization and increases in general unemployment at the firm level membership in an employer association has a significant positive effect on employer participation in active labor market programs in corporatist denmark but not in the pluralist united kingdom

industry the state and the new protectionism textiles in canada and france in this article we address two questions pertinent to the debate on the relationship between industrial restructuring and the new protectionism first does the appearance of industry specific trade barriers necessarily indicate an attempt to preserve those traditional sectors in which advanced capitalist states no longer enjoy a comparative advantage second are all advanced capitalist states equally susceptible to protectionist pressures or will neomercantilist states given their established capacity for sectoral intervention find such pressures easier to resist than their liberal counterparts after analyzing recent changes in textile technology and in the pattern of international competition in the textile industry we examine the response of two states the relatively liberal canadian state and the neomercantilist french state to this complex set of changes the textile case indicates that it is a mistake to assume that states have but two options protect or adjust links may be established between hightechnology and traditional industries that make it possible for inputs from the former to restore the competitive position of the latter if such links are forged then states may use trade barriers to allow producers time to adjust french and canadian textile policies reveal the conditions under which such states although constrained by established policy networks are nevertheless induced to respond in similar fashions to contemporary changes in the world economy

u s corporate interests and the political economy of trade policy this paper examines the behavior of american corporations with respect to international trade policy initiatives during the 1970s using survey generated data on revealed corporate trade policy interests and firmand industry level data on company characteristics direct or proxy variables were developed and applied in linear regression equations using an ordered probit specification and in an alternative approach using factor analysis to construct a composite dependent variable hypothesized relationships were verified between corporate positions on trade liberalization and the intensity of competition from imports the benefits from improved access to foreign markets and internal risk pooling capabilities of firms firms exposed to the international competitive environment inevitably have a stake in national trade policy this paper explores the revealed behavior of u s corporations on matters of trade policy in the 1970s it develops a set of hypotheses linking corporate trade policy positions to a series of company and industry attributes these hypotheses are tested using survey generated information regarding corporate behavior on trade policy matters beginning with the protectionist burke hartke initiatives of the early 1970s through the post tokyo round period at the end of the decade studies of the political economy of protection typically begin with the proposition that import barriers create rents that can be appropriated by the protected industry the size of the rents to be obtained and their probable division among the various participants in the industry partly determine the intensity of protection seeking behavior lobbying undertaken by participants in the industry brock and magee 1978 the intensity is also influenced by the degree of success expected in the political arena and by imperfections in the lobbying process for instance the incentive to be a free rider on the lobbying efforts of others walter and jones 1981 the actual outcome of protection seeking activity is conditioned by a variety of political considerations as well for instance politicians may be constrained by the possibility of repercussions from groups adversely affected by protection including consumers and export oriented industries foreign competitors are also affected so that issues concerning foreign relations enter into the decision process in addition politicians may be influenced more generally by ideology party platforms or attitudes toward equity a number of researchers including ball 1967 fieleke 1976 clark 1980 and ray 1981a 1981b have verified that a significant positive correlation exists between nominal tariff rates or effective rates of protection across manufacturing industries and low skilled labor intensity taken to be an indicator of the intensity of import competition and thus related to the size of the rents that could be obtained by protection cheh 1974 and bale 1977 analyzed the determinants of the percentage reductions in rates of duty resulting from the kennedy round tariff cuts concluding that the cuts were determined in such a way as to minimize labor adjustment costs see also allen lewis and tower 1980 marvel and ray 1983 also explored the determinants of kennedy round tariff cuts finding the size of tariff cuts tended to be smaller if an industry was more concentrated or sold a larger fraction of its output to household consumers and larger if the industry was more intensive in research and development r d or more highly unionized the result for r d presumably represents the desire at the industry level for improved access to export markets achievable through larger reciprocal reductions in protection on the part of foreign countries along somewhat different lines baldwin 1976 analyzed several key congressional votes on the received for publication november 21 1983 revision accepted for publication december 14 1984 new york university the authors are grateful to robert lipsey robert j levenson j peter jarrett and james green for providing data that contributed to this study to jang ro lee ashok chatterjee and monica kaufmann for research assistance and to bill greene for providing advice on the estimation technique and computer program used to perform the statistical analysis thomas a pugel is also grateful for the support of an esmee fairbaim research fellowship at the university of reading 1 in both studies ray also explores nontariff barriers ntbs across u s manufacturing industries aside from finding a positive relationship between tariff rates and ntbs the results are not easily interpreted however there is some inferential evidence in walter 1971 which finds a significant positive relationship between ntb incidence and presumably relatively low skill intensive developing country exports

constituency interests and delegation in european and american trade policy trade policy in the eu and the united states is to a large extent delegated to executive agents existing explanations claim that legislators delegate because they wish to liberalize but are unable to achieve this on their own the authors show that legislators delegate powers to obtain foreign market access for exporters and protection for import competing interests confronted with heterogeneousdemands from both groups principals delegate to two sets of agents to confer concentrated benefits on these constituencies and install control to avoid concentrated losses while maintaining the flow of resources from lobbying the authors derive the empirically observable implication that with the increase in the share of tradables in the overall economy delegation as well as control should steadily increase with time they then test the validity of this proposition for u s trade policy since 1916 and for european trade policy since 1958

bureaucratic discretion or congressional control regulatory policymaking by the federal trade commission this paper extends stigler and peltzman s approach to regulation by incorporating a legislature the model yields comparative statics results and hence testable implications the paper then tests between two opposing approaches about regulatory agency behavior the first assumes agencies operate independently of the legislature and hence exercise discretion the second assumes that congress controls agency decisions the recent behavior of the federal trade commission provides the empirical setting substantial evidence is found for the specific predictions of the model including the hypothesis of systematic congressional influence over ftc decisions

decomposing the effects of negative framing in linear public goods games i examine two dimensions of framing in public goods games contributing vs taking and gains vs losses i find decreased cooperation under the taking frame but not under the loss frame this framing effect is stronger for men than women

imf conditionality threat perception and political repression a cross national analysis this article investigates the impact of international monetary fund imf conditionality on political repression conditionality refers to the conditions that borrowing countries must implement bef

proliferating regional trade arrangements why and whither this paper investigates why regional trade arrangements rtas are proliferating extensively and how the effects of multiple rtas by interacting with each other evolve over time our empirical analysis based on an extended gravity model utilising a large panel dataset of 175 countries from 1948 to 1999 shows that rtas on average increase global trade by raising intra bloc trade without damaging extra bloc trade the net trade effects however heavily depend on the types of rta strategic evolution over time which we categorise as expansionary rtas duplicate rtas or overlapping rtas we find that countries excluded from an rta can benefit more from duplicating a separate rta than from joining an existing rta this result explains why the number of bilateral trade blocs rather than the membership size of existing rtas is currently exploding we also find that the net trade creating effects of rtas are substantially lower for countries participating in overlapping rtas this result suggests that it is less likely that the currently proliferating rtas will completely merge and lead the world economy to global free trade our empirical results are robust to controlling for the characteristics of countries that may influence the impact of rtas

learning and noisy equilibrium behavior in an experimental study of imperfect price competition we consider a duopoly pricing game with a unique bertrand nash equilibrium the high price firm has a nonvanishing market share however and intuition suggests that observed prices may be positively related to this market share this relationship is implied by a model in which players make noisy logit best responses to expected payoff differences the resulting logit equilibrium model was used to design an experiment in which the high price firm s market share varies the model accurately predicts the final period price averages a naive learning model predicts the observed differences in the time paths of average prices

the international organization of third world debt third world debt grew very rapidly in the 1970s many states faced with sharply higher costs for energy and manufactured imports borrowed aggressively in unregulated offshore capital markets but what constrains sovereign states to repay this debt to commercial banks creditors do not turn to their home states to enforce payment rather the supervision of sovereign debt is largely a function of commercial banking arrangements especially lenders syndicates and the international monetary fund s conditional lending this political structure which involves unified private sanctions has ensured that no state defaults unless it is insolvent or is willing to accept a radical rupture in its international commercial relationships when the problem is insolvency creditors routinely convene ad hoc conferences in conjunction with an imfapproved stabilization program creditors can renegotiate debt service schedules and provide new financing if necessary these arrangements are distinctive among international economic regimes because they rely on nonstate actors as the primary source of rules norms and procedures

the institutional foundations of hegemony explaining the reciprocal trade agreements act of 1934 in 1930 congress approved the highly restrictive smoot hawley tariff the textbook case of pressure group politics run amok four years later congress passed the reciprocal trade agreements act rtaa surrendering much of its tariff making authority to a policy process in which internationalists had increasing influence while the united states had used reciprocity to expand exports before the stick of discriminatory treatment took precedence over the carrot of liberalizing concessions with the transfer of tariff making authority to the executive the united states could make credible commitments and thus exploit its market power to liberalize international trade despite later modifications the rtaa set the fundamental institutional framework for trade politics

the unraveling of the multi fiber arrangement 1981 an examination of international regime change as competition between newly industrializing and advanced industrialized countries has increased trade protection has become a key issue in textile and apparel trade international regimes to regulate trade intervention have existed since the early 1960s the 1981 renewal of the multi fiber arrangement poses two puzzles first why did countries choose to continue to manage conflict through an international regime rather than through some other arrangement second why did the regime become weaker and more protectionist than in the past an international structure approach suggests that regimes are wanted to prevent arrangements in larger systems from being undermined to control the behavior of other countries and to reduce information costs variation in regime strength can be explained by asymmetry in the distribution of capabilities in various systems the nature of the regime is influenced by changes in international competition and by nesting a domestic structure approach on the other hand focuses on the relationships between state and societal groups the commission and member states in the case of the eec the relative strength of groups affects national policies and the development and characteristics of regimes a processtracing examination of international textile negotiations emphasizing the response of decision makers to structural constraints and incentives allows us to ascertain the relative influence of international and domestic structures on the negotiations and outcomes

the effects of imf programs in the third world debate and evidence from latin america abstract this article reviews the debate about the effects of imf sponsored stabilization programs in the third world after examining recent studies by fund economists results of a new study on a latin american country set are presented in this research imf programs are associated with insignificant changes in the current account significant improvements in the overall balance of payments increases in inflation mixed effects on growth and a strong and consistent pattern of reduction in labor share of income the latter result is incorporated into a distribution oriented critique of fund policy

the transformation of trade the sources and effects of regime change regimes can be analyzed both as outcomes to be explained and as mediating social institutions that affect international transactions in the case of postwar trade the changing outcomes can be predicted simply and with rough accuracy by a hegemonic model yet that model cannot explain the continuing reduction of tariffs the development of new nontariff codes and the persistence of crucial norms rules and institutions these durable features of modern trade suggest that the logic of regime maintenance is distinct from that of regime initiation nor can the hegemonic model account for the regime s highly uneven weakening the most prominent trade barriers are in mature basic industries the least prominent are in industries with differentiated products and extensive research and development expenditures one explanation which usefully complements a hegemonic model is that sectors differ systematically in their capacity to adapt competitively to imports and hence in their need to preserve their position by trade barriers despite the regime s uneven weakening trade volumes have continued their secular growth in sectors where the regime remains strong it has stimulated two way trade in similar products intraindustry trade where the regime is weaker new nontariff barriers diminish hypothetical trade growth but rarely aim at a permanent rollback in market shares or trade volume

the political economy of administered protection trade restrictions are hardly ever voted directly by congress though the threat of direct congressional action is frequently present pressure for protection is usually applied through the major instruments for the administrative regulation of imports the antidumping and countervailing duty procedures and the escape clause mechanism in this paper we will examine these instruments for the administrative regulation of imports the form of the paper is not novel a theory of how these mechanisms work is developed then operational implications of this theory are deduced and tested over the record of countervailing duty antidumping and escape clause cases decided from 1975 through 1979 this is the period over which the trade act of 1974 was in force because the nature of these mechanisms is relatively unfamiliar a relatively large amount of institutional information is provided

risk averse behavior in generalized matching pennies games in experimental studies of behavior in 2 2 games with unique mixed strategy equilibria observed choice frequencies are systematically different from mixed strategy nash predictions this paper examines experimental results for a variety of such games and shows that a structural econometric model which incorporates risk aversion into a quantal response equilibrium explains the data very well moreover risk aversion estimates are stable across the different games and are close to those obtained from laboratory and field auction data as well as from individual lottery choice experiments

the impact of nafta on the united states we describe the main economic arguments posed for and against the north american free trade agreement nafta during the u s policy debate to evaluate these arguments we analyze recent trade data and survey post nafta studies we find that both the u s and mexico benefit from nafta with much larger relative benefits for mexico nafta also has had little effect on the u s labor market these results confirm the consensus opinion of economists at the time of the debate finally studies find that trade creation greatly exceeds trade diversion in the region under nafta especially in intermediate goods

pacs and the congressional supermarket the currency is complex although pacs attempt to influence the legislative process with contributions this research finds little evidence that the contributions of 120 pacs affiliated with 10 organizations affected the voting patterns of the house members who served continuously from 1975 to 1982 in the few cases in which a relationship between contributions and a member s votes is established the analysis indicates that contributions are a surrogate measure of a more important and larger package of support for the member from the interest groups two stage least squares regression models are used to test the relationship between pac contributions and a member s votes controlling for the incumbent s ideology and party and the political leaning of the district interviews with pac officials supplement the statistical analysis

anomalous behavior in a traveler s dilemma the notion of a nash equilibrium has joined supply and demand as one of the two or three techniques that economists instinctively try to use first in the analysis of economic interactions moreover the nash equilibrium and closely related game theoretic concepts are being widely applied in other social sciences and even in biology where evolutionary stability often selects a subset of the nash equilibria many people are uneasy about the stark predictions of the nash equilibrium in some contexts where the extreme rationality assumptions seem implausible kaushik basu s 1994 traveler s dilemma is a particularly convincing example of a case where the unrelenting logic of game theory is at odds with intuitive notions about human behavior the story associated with the dilemma is that two travelers purchase identical antiques while on a tropical vacation their luggage is lost on the return trip and the airline asks them to make independent claims for compensation in anticipation of excessive claims the airline representative announces

economic stabilization conditionality and political stability imf conditionality is seldom so important that it dominates all other considerations for political stability imf stabilization programs often shift benefits from one group to another they expose elites to charges of selling the sovereignty of their countries the imposition of imf conditions particularly subsidy cuts may lead to sharp outbreaks of civil disorder nonetheless the imf provides resources that make adjustment easier and thus may lessen the chances of political instability for a country imf programs are seldom implemented fully as negotiated and the penalties for partial compliance are not great debtor countries have more flexibility in imposing austerity measures and the economic constraints are less binding than often assumed the very availability of alternatives to imf programs results in internal divisions because some favor debt repudiation and others oppose it groups now contend over solutions to the debt problems of their countries

the gatt and the regulation of trade barrier regime dynamics and functions since the second world war complex and changing sets of norms and rules have governed trade relations among most countries they have largely originated from a unique and accidental international organization the general agreement on tariffs and trade gatt we have labeled these norms rules and decision making mechanisms the gatt regime or global trade barriers regime the importance that gatt members have attached to certain norms has shaped the regime s procedural mechanisms rules and implementation of rules classifying those norms as sovereignty or interdependence norms we posit that the strength or autonomy of the regime can be established by analyzing the prominence of the interdependence norms in the issue area we close by exploring some of the functions of the regime in international trade and political relations

rocks hard places and the new protectionism textile trade policy choices in the united states and japan why have advanced industrial countries responded with different types of protectionist policy to postwar international competition and the resulting societal pressure for state action in contrast to the across the board tariff wars of the 1930s postwar protectionism is a patchwork of tariffs unilateral and nonunilateral quotas administrative restrictions state subsidies and production cartels arguments based on international economic structure international regimes statist approaches and domestic structure all appear to have difficulty in accounting for divergent trade policy choices this article introduces a more nuanced identification and integration of the international and domestic sources of the new protectionism an examination of textile trade policy in the united states and japan reveals that when state policymakers face conflicting international constraints and domestic pressure over the use of overt types of protectionist policy the greater the domestic pressure the more overt the policy response

deeper integration in east asia regional institutions and the international economic system sea change in east asian perceptions of the international economic system is causing a determined thrust toward deeper east asian integration through regional financial and trade institutions the financial crisis of 1997 98 contributed to this change by revealing weaknesses in the international financial architecture at the same time that it bared weaknesses in domestic policies and institutions in east asia many east asians felt the existing international financial system failed to provide them with adequate prescriptions or aid at a time of great need in response governments are intensifying regional policy cooperation and have begun to develop regional institutional capacity to head off future financial crises and manage them if they occur this change in perceptions of the international economic system has been reinforced by paralysis in the world trade organisation wto the failure of governments to launch a new round of multilateral trade negotiations at the november 1999 wto ministerial meeting in seattle is helping to propel regional approaches to trade liberalisation deeper integration in east asia is a potentially substantial development which will influence the future shape of the international economic system in section 2 i review the primary factors contributing to the financial crisis and discuss the implications for policy makers in east asia in a context of diminished confidence in global institutions the emphasis is on macroeconomic policy management structural reforms changing incentive systems overhauling crisis

political repression and economic doctrines the case of argentina recent studies linking political repression to free market economic policy have failed to explain fully the relationship to uncover important theoretical linkages this article will examine the principles behind policy and argue that increases in governments use of force are principally a function of 1 shifts in economic stabilization doctrines from structuralist to orthodox which are prompted by severe economic crises and 2 strengthened alliances between ruling elites and international financial institutions partial to orthodox deflationary strategies multiple regression analysis on time series data from argentina over a 23 year period provides a strong statistical confirmation for these suppositions even when holding constant for particular regime types a historical narrative has been provided to buttress these results by establishing the precise timing and sequence of events that precipitated the use of coercion by state leaders

what is the energy policy planning network and who dominates it a network and qca analysis of leading energy firms and organizations this study examines the structure of the energy industry and the energy policy planning network eppn i use cross sectional director interlocks from 2002 to examine the social networks amongst a sample of the largest energy firms between these firms and the eppn and to calculate relative network centrality measures for the firms i then use qualitative comparative analysis qca to isolate specific combinations of energy firm attributes that are associated with network position i find that the energy industry has several key intra firm interlocks that link dominant companies to each other and that the industry is well represented on the boards of eppn organizations additionally several dominant energy firms provide links between ultra conservative and moderate policy development organizations finally qca models suggest that firms with many employees high revenue and who produce oil are most likely to hold prominent positions in the eppn though above average political campaign contributions offer an alternative path into the network

explaining the non proliferation regime anomalies for contemporary international relations theory this article reconciles common policy usage with scholarly definition the system of cooperation on non proliferation has often been termed an international regime but there has not been any systematic effort to determine if this is actually true the discussion also attempts to reconcile the formation and maintenance of this system of cooperation with contemporary international relations theory the central argument is that the system of international cooperation on non proliferation does constitute a regime but that such a regime presents a serious anomaly for contemporary theory the article concludes that power and egoistic self interest are inadequate to account for the regime s formation and maintenance the inadequacies of both the hegemonic stability and functional theories point towards another independent variable that needs central consideration in regime analysis knowledge and learning

coordination versus prisoners dilemma implications for international cooperation and regimes the study of political institutions in general and international cooperation in particular has been beneficially influenced by the prisoners dilemma pd game model but there is a mistaken tendency to treat pd as representing the singular problem of collective action and cooperation by relaxing the assumptions of 2 2 games and developing an alternate model of the coordination game i show how some cooperation problems have very different properties from those found in pd the analytical results of the two games are compared across several important dimensions number of strategies available number of iterations of the game numbers of players and the distribution of power among them the discussion is illustrated with specific problems of international cooperation and the implications of alternative cooperation problems for the formation and performance of international regimes are explored the basic solutions for pd and coordination have divergent ramifications for the institutionalization stability and adaptability of regimes and for the role of hegemony in the international system however the coordination model does not replace the pd model but complements and supplements it as a way to understand the diversity of political institutions these results are widely applicable to areas of politics beyond international relations

the state as strategist in international business research no matter what strategy managers choose cross national differences in states strategic capabilities and objectives affect multinational corporations capabilities to manage interdependent operations in this paper we develop four attribute dimensions along which states strategic economic capabilities vary we then apply these dimensions to show how they contribute to familiar international business models of managerial process mnc strategy and organizational structure and country competitiveness

divided government and u s trade policy theory and evidence if different parties control the u s congress and white house the united states may maintain higher import protection than otherwise this proposition follows from a distributive politics model in which congress can choose to delegate trade policymaking to the president when the congressional majority party faces a president of the other party the former has an incentive to delegate to but to constrain the president by requiring congressional approval of trade proposals by up or down vote this constraint forces the president to provide higher protection in order to assemble a congressional majority evidence confirms that 1 the institutional constraints placed on the president s trade policymaking authority are strengthened in times of divided government and loosened under unified government and 2 u s trade policy was significantly more protectionist under divided than under unified government during the period 1949 90

does mercosur s trade performance raise concerns about the effects of regional trade arrangements this study employs a new methodological approach that measures production efficiency in changing trade patterns it shows that the most rapidly growing products in mercosur s intratrade generally are goods in which members do not have a comparative advantage and have not been able to export competitively to outside markets this is consistent with substantial trade diversion within the arrangement mercosur s discriminatory tariffs against nonmembers which are four to six times higher than those in arrangements such as the european union european free trade area or north american free trade agreement are likely the cause recent further increases in mercosur s tariffs against nonmembers are likely to exacerbate the magnitude of trade diversion

cooperating over losses and competing over gains a social dilemma experiment evidence from studies in international relations the politics of reform collective action and price competition suggests that economic agents in social dilemma situations cooperate more to avoid losses than in the pursuit of gains to test whether the prospect of losses can induce cooperation we let experimental subjects play the traveler s dilemma in the gain and loss domain subjects cooperate substantially more over losses furthermore our results suggest that this treatment effect is best explained by reference dependent risk preferences and reference dependent strategic sophistication we discuss the implications of our results and relate our findings to other experimental games played in the loss domain

tariff protection in developed and developing countries a cross sectional and longitudinal analysis four political models the international system rational domestic economic policy intragovemmental politics and interest group influence may explain the cross national structure of average nominal levels of tariffs on manufactures using available data measuring or approximating the explanatory variables for the time periods 1902 and 1971 selected hypotheses were tested in regression equations the 1971 tariff levels are best predicted by rational economic policy variables while for 1902 international power variables provide the best predictions of the tariff in general the causal forces influencing the cross national pattern of tariff levels appear to have shifted in the 20th century from those indicating international power to those measuring domestic politico economic development these results provide evidence relevant to some of the general propositions about size and development suggested by the contemporary political economy literature they also lend support to those who argue that a rising level of international interdependence has resulted in long term changes in the pattern of influences on national public policies

state structure and economic adjustment of the east asian newly industrializing countries an analysis of the economic adjustment policies of hong kong singapore south korea and taiwan during the 1970s and 1980s shows that these east asian newly industrializing countries nics which faced common problems in sustaining their recent industrial growth responded to the challenge with industrial adjustment strategies that differed in their degree of intensity of state involvement and emphasis on national control to explain this divergence in adjustment strategies the article explores the variations in the national political structures of the four nics and focuses particularly on three aspects of state structure the organization of the economic bureaucracy the institutional links between the state and private sector and the larger state society relations the article demonstrates the usefulness of moving beyond the generalizations of the developmental state view by carefully disaggregating these aspects of state structure and by exploring the ordering logic that gives coherence to them

the magic bullet the rtaa institutional reform and trade liberalization the reciprocal trade agreements act rtaa of 1934 has long been heralded as a simple institutional reform with revolutionary consequences namely by changing the trade policymaking process in the united states the rtaa is held responsible for the dramatic liberalization in u s policy beginning in the 1930s and 1940s this article takes issue with this conventional wisdom i argue that the standard accounts which emphasize the importance of delegation for overcoming logrolling in congress or for facilitating reciprocity in international trade negotiations fail to provide an adequate explanation for just how the institutional innovation was achieved and sustained in the face of protectionist opposition i suggest instead that trade liberalization was driven by exogenous changes in party constituencies and societal preferences that had crucial effects on congressional votes to extend the rtaa authority and liberalize trade after 1945 the preservation of the rtaa program was symptomatic rather than causal as a consequence it may well be abandoned in the future the evolution of u s trade policy has been and will continue to be powerfully shaped by changes in the preferences of societal groups and in the positions taken by parties on the trade issue

macropolitical consensus and lateral autonomy in industrial policy the nuclear sector in brazil and argentina levels of macropolitical consensus and sectoral institutional autonomy both influence industrial policy different combinations of high or low consensus and autonomy help anticipate the respective explanatory relevance of generic industrial models sectoral agencies trajectories and bureaucratic politics industrial policy choices thus are not always determined by international market opportunities relevant domestic endowments or the political strength of industrial entrepreneurs the nuclear sectors in brazil and argentina are examined in light of this argument a relatively strong consensus over the generic industrial model and a centralized decision making process explain state entrepreneurship and foreign technology in brazil in contrast argentina s emphasis on domestic private entrepreneurial and technical resources can be traced to an absence of macropolitical consensus and to sectoral institutional autonomy these differences had implications for the process of bargaining with foreign technology suppliers levels of consensus and autonomy influence the process of bargaining with foreign technology suppliers through their impact on the size of domestic win sets on risks of involuntary defection on credibility of commitments and on reduction of uncertainties

interlocks pacs and corporate conservatism two alternative corporate political strategies are identified for political action committee pac contributions to candidates in the 1980 congressional elections 1 a pragmatic effort to promote a particular company s best interests and 2 an ideological effort to promote conservatism with the use of multiple regression this article examines three theoretical explanations of corporate political strategies the expectations of corporate liberal theory are not confirmed rather there is support for both state structure and interlock theories it is argued that at least in 1980 business political behavior was ideologically conservative which business understood to represent classwide rational interests

the 11 20 money request game a level k reasoning study we study experimentally a new two player game each player requests an amount between 11 and 20 shekels nis he receives the requested amount and if he requests exactly one shekel less than the other player he receives an additional 20 shekels level k reasoning is appealing due to the natural starting point requesting 20 and the straightforward best response operation nevertheless almost all subjects exhibit at most three levels of reasoning using two variants of the game we demonstrate that the depth of reasoning is not increased by enhancing the attractiveness of the level 0 strategy or by reducing the monetary cost of undercutting the other player

does auctioning of entry licences induce collusion an experimental study we use experiments to examine whether the auctioning of entry rights affects the behaviour of market entrants standard economic arguments suggest that the licence fee paid at the auction will not affect pricing since it constitutes a sunk cost this argument is not uncontested though and this paper puts it to an experimental test our results indicate that an auction of entry licences has a significant positive effect on average prices in oligopoly but not in monopoly these results are consistent with the conjecture that entry fees induce players to take more risk in pursuit of higher expected profits in oligopoly entry fees increase the probability that the market entrants coordinate on a collusive price path in monopoly taking more risk does not make sense since average prices are already close to the profit maximizing price

the dynamics of negotiated protectionism r ecent protectionism by the united states has principally taken the form of negotiated barriers to trade such as voluntary export restraints these barriers tend to evolve over time and to display three patterns which we label institutionalized temporary and sporadic protectionism cartel theory and studies of the politics of protection suggest that the dynamics of negotiated protectionism will depend on three variables the barriers to entry into an industry the size of the domestic industry and the exit barriers for domestic firms low barriers to entry will lead to institutionalized protectionism when the domestic industry is large and exit difficult temporary protectionism results when the domestic industry is small and exit easy and sporadic protectionism is likely when barriers to entry are high brief studies of u s protectionism in textiles and apparel steel footwear televisions and automobiles illustrate the value of this framework t rade protectionism has often been thought of as a unilateral act by a sovereign state yet much protectionism during the 1970s and 1980s has been negotiated rather than unilaterally imposed voluntary export restraints vers and similar arrangements have become the preferred means by which the united states has sought to cartelize industrial sectors threatened by imports such negotiated protectionism has been particularly evident in five industries in the united states during part or all of the last quarter century in textiles and apparel steel footwear television sets and autos the united states has negotiated trade restrictions with numerous foreign exporters while the u s government has occasionally provided unilateral measures of protection for small industries all u s administrations since world war ii have been reluctant to countenance general schemes of protection for major industries yet beginning with the eisenhower administration s negotiations in textiles in 1956 virtually every u s president has actively sought vers for economically and politically sensitive industrial sectors

your loss is my gain a recruitment experiment with framed incentives empirically labor contracts that financially penalize failure induce higher effort provision than economically identical contracts presented as paying a bonus for success an effect attributed to loss aversion this is puzzling as penalties are infrequently used in practice the most obvious explanation is selection loss averse agents are unwilling to accept such contracts i formalize this intuition then run an experiment to test it surprisingly i find that workers were 25 percent more likely to accept penalty contracts with no evidence of adverse or advantageous selection consistent with the existing literature penalty contracts also increased performance on the job by 0 2 standard deviations i outline extensions to the basic theory that are consistent with the main results but argue that more research is needed on the long term effects of penalty contracts if we want to understand why firms seem unwilling to use them

free trade areas in east asia discriminatory or non discriminatory ver the past decade we have witnessed the worldwide proliferation ofregional trade arrangements rtas even after the launch of the wtomultilateral trading system rtas have continued to spread however there havebeen marked variances across regions in terms of the degree to which regionaltrade integration has been carried out the east asian region is characterised bythe dearth of rtas regional integration moves have involved merely partial orloosely institutionalised groupings i e afta asean free trade area andapec asia paci c economic cooperation in particular the major three eastasian countries china japan and korea have tended to bypass the prevalenttrend of regionalism and instead have generally preferred multilateral trade liberal isation approaches under the gatt and wto regulations regarding rtas their stance against regionalism has mainly been for the following reasons i relative predominance of interregional trade and investment relations overintraregional transactions ii historical animosities stemming from the legaciesof japanese colonialism iii lack of central leadership and iv diversities inculture race language and level of economic development within the region in recent years however the region s support has shifted from multilateraltrade arrangements to rtas a turning point was the outbreak of the east asian nancial crisis in 1997 besides triggering massive economic unrest in east asia the crisis revitalised the demand for regional economic cooperation which calledfor more cooperation and policy coordination among neighbouring economies

between free trade and protectionism strategic trade policy and a theory of corporate trade demands conventional theories of the political economy of trade argue that industries in import competing businesses favor protectionism while multinational firms and export dependent corporations advocate unconditional free trade however many multinational industries have recently advocated strategic trade policies that is they are willing to support free trade at home only if foreign markets are opened or foreign governments reduce subsidies to their firms if demands for strategic trade policy were adopted by the united states they could represent a threat to the general agreement on tariffs and trade gatt and the multilateral trading system this article seeks to explain the emergence of these new corporate trade demands and thereby broaden theories of the political economy of trade the article begins with the widely supported position that multinational and export oriented firms prefer unconditional free trade building on concepts from theories of industrial organization and international trade the article then hypothesizes that rising economies of scale and steep learning curves will necessitate that these firms have access to global markets via exports if growing dependence on world markets is combined with foreign government subsidies or protection the trade preferences of firms will shift from unconditional free trade to demands that openness at home be contingent on openness overseas the manner in which firm demands then get translated into industry demands will vary with the industry s structure if the industry consists of firms with symmetric strategies it will seek strategic trade policy but if the industry is highly segmented it will turn toward protectionism the article concludes with a preliminary test of these hypotheses in four brief studies of the politics of trade in the semiconductor commercial aircraft telecommunications equipment and machine tool industries

reference points and effort provision a key open question for theories of reference dependent preferences is what determines the reference point one candidate is expectations what people expect could affect how they feel about what actually occurs in a real effort experiment we manipulate the rational expectations of subjects and check whether this manipulation influences their effort provision we find that effort provision is significantly different between treatments in the way predicted by models of expectation based reference dependent preferences if expectations are high subjects work longer and earn more money than if expectations are low

habitual and occasional lobbyers in the u s steel industry an em algorithm pooling approach bernard yeung using u s steel firm data we find that lobbying for import protection appears to be habit forming to identify heterogeneity in lobbying behavior among firms we use an expectation maximization algorithm to sort our firms into groups with different propensities to lobby and estimate the determinants of lobbying in each group a two pool model emerges occasional lobbyers lobbying depends on their market performance and habitual lobbyers lobbying only depends on past lobbying the latter tends to be larger steel firms whose business is more focused in steel our evidence is consistent with dynamic economies of scale in protection seeking breeding protection dependent firms jel f13 1 introduction rent seeking activities plausibly have dynamic economies to scale past rent seeking experience should reduce the cost of further rent seeking and increase its return thus rent seekers may over time become more prone to further rent seeking and even become dependent on it given the large welfare losses theoretically associated with rent seeking e g bhagwati 1982 1988 and magee et al 1989 a better understanding of actual rent seeking behavior is required in particular empirical verification of the self sustaining nature of rent seeking is of fundamental importance lobbying for protection from import competition is a form of rent seeking this article uses data on lobbying for protection by firms in the steel industry in the 1970s and 1980s to show that a habit forming effect does exist in a preliminary investigation we pool all firm level data and find that past lobbying increases the current tendency to lobby however not all firms have the same propensity to lobby to allow heterogeneity among firms dependence on past lobbying we apply an expectation maximization em algorithm approach dempster et al 1977 to a lagged dummy model heckman 1982a 1982b this lets our firms sort themselves into groups according to the determinants of their lobbying activity our statistical results suggest that an acceptable division of our data is a division into two groups occasional lobbyers whose lobbying depends on the firm s market performance and habitual lobbyers whose lobbying is essentially unrelated to the firm s business situation and depends mainly on past lobbying firms that never lobby for protection end up in the first group greater firm size and greater focus in steel production are associated with increased lobbying in both groups but the influence is stronger for occasional lobbyers past sales growth and spending on modern equipment are associated with curtailed lobbying by occasional rent seekers but are unrelated to lobbying by habitual rent seekers changes in cash flow have no influence in either generally habitual lobbyers are larger firms whose business is more concentrated on steel they are naturally more inclined than occasional lobbyers to initiate lobbying however their lobbying appears to have become a habit divorced from their market pe rformance these results are consistent with the presence of economies of scale in rent seeking and with rent seeking being habit forming e g magee et al 1989 in the next section we describe the intensive lobbying for protection in the u s steel industry in the 1970s and 1980s we justify our contentions that lobbying for protection by steel firms in the sample period may be habit forming and that different groups of firms should have dissimilar propensities to lobby for protection in section iii we explain the em algorithm approach we explain the data in the fourth section and report our results in section v section vi concludes ii habitual and occasional lobbying in the u s steel industry in the united states domestic firms under import competition pressure often complain to the government about unfair foreign practice