bipolarity multipolarity and free trade recent literature typically attributes the relative scarcity of open international markets to the prisoner s dilemma structure of state preferences with respect to trade i argue that the prisoner s dilemma representation does not reflect the most critical aspect of free trade agreements in an anarchic international system security externalities explicit consideration of these effects suggests that a bipolar international political system has an advantage relative to its multipolar counterpart with respect to the opening of markets among states less credible exit threats and stronger incentives to engage in altruism within its alliances explain the advantage of a two power system the real income gains that motivate free trade are also the source of the security externalities that impede it their ability to internalize these effects makes military alliances the natural basis of agreements to open international markets the evolutionary prospects of alliances vary however ones that are the products of bipolar systems are more likely to evolve into free trade coalitions than are their multipolar counterparts i argue that less credible exit threats and stronger incentives to engage in alliance altruism explain the advantage of a two power system several important limits of the argument should be made clear immediately i argue at the systemic level i attempt to isolate the political and economic incentives for free trade that occur at the level of the international system i do not therefore consider the impact of unitlevel factors on the pursuit of these incentives for example neither the role of special interest groups nor the organization of domestic exchange via hierarchies instead of markets is considered doyle 1986 frieden 1988 ruggie 1982 the conditions i assume are those of standard international trade theory ethier 1983 and illustrative rather than systematic empirical referents are used these restrictions are appropriate given my purpose to demonstrate analytically the advantage of a bipolar international political system with respect to free trade

the commons as a natural barrier to entry why there are so few fish farms a competitive industry which overuses a common access resource may create a barrier to entry similar to spence s example of a cartel that uses excess capacity to prevent entry in most industries when a new firm enters existing firms find that their demand curves have fallen so they reduce their output to accommodate the new entrant in spence s model the cartel disintegrates upon entry so that the output of existing firms increases which may make entry unprofitable in an open access fishery the supply curve bends backward thus a fall in price created by the entry of a fish farm increases rather than decreases supply in the backwardbending portion of the supply curve an important implication of this theory is that fish farms are more likely to be unprofitable the more heavily overharvested is a species in a common property competitive market this natural barrier to entry may explain why true mariculture is barely in its infancy bardach ryther and mclarney

decision maker preferences for international legal cooperation why do some decision makers prefer big multilateral agreements while others prefer cooperation in small clubs does enforcement encourage or deter institutional cooperation we use experiments drawn from behavioral economics and cognitive psychology along with a substantive survey focused on international trade to illustrate how two behavioral traits patience and strategic reasoning of individuals who play key roles in negotiating and ratifying an international treaty shape their preferences for how treaties are designed and whether they are ratified patient subjects were more likely to prefer treaties with larger numbers of countries and larger long term benefits as were subjects with the skill to anticipate how others will respond over multiple iterations of strategic games the presence of an enforcement mechanism increased subjects willingness to ratify treaties however strategic reasoning had double the effect of adding enforcement to a trade agreement more strategic subjects were particularly likely to favor ratifying the agreement we report these results for a sample of 509 university students and also show how similar patterns are revealed in a unique sample of ninety two actual us policy elites under some conditions certain types of university student convenience samples can be useful for revealing elite dominated policy preferences different types of people in the same situation may prefer to approach decision making tasks and reason through trade offs in materially different ways

environmental policy and international trade when governments and producers act strategically some environmentalists express concern that trade liberalization may damage the environment by giving governments incentives to relax environmental policies to give domestic producers a competitive advantage support for such concern may be given by models of imperfectly competitive trade where there may be rent shifting incentives for governments to relax environmental policies but there are also incentives for producers to act strategically e g through their investment in rd ii allowing governments to act strategically increases the incentive for producers to act strategically iii welfare is lower when both parties act strategically and iv strategic behavior by producers and governments is greater when governments use emission taxes than when they use emission standards

retaliation bargaining and the pursuit of free and fair trade that domestic political economic factors are important determinants of a nation s trade barriers has been empirically well established however the question of how effective strategically retaliatory trade barriers are in deterring foreign protectionism has received far less systematic empirical attention in this article we use bilateral nontariff barrier ntb data between the united states and five developed partner countries japan france germany italy and the united kingdom to systematically examine the effectiveness of strategic retaliation we employ a simultaneous tobit model where the home and foreign ntb levels are determined endogenously in a bilateral game the model provides estimates of deterrence coefficients that is the reduction in foreign trade barriers as a result of u s retaliation which we use to characterize the nature of bilateral ntb games our hope is that the empirical results presented here which have realistic though controversial implications will inform u s trade policy

how does free trade become institutionalised an expected utility model of the chretien era this paper seeks to go beyond the question of why free trade and pursues issues related to the tendency for controversial free trade agreements to become institutionalised in other words why do opponents of free trade not mobilise to overturn it even more puzzling why do opposition parties which had opposed passage of free trade in the first place not undo liberalisation undertaken by their predecessors upon coming to power rather than seek reversal it is not uncommon for free trade opponents upon assuming control of the government to deepen liberalisation initiatives hence serving to institutionalise the very policies they had decried vigorously seven sections make up this study it begins with a statement of the basic puzzle and an illustration in the recent canadian context the second section is a theoretical discussion of opposition parties and free trade an expected utility model based on the limits of rent seeking is introduced in the third and fourth sections to explain institutionalised free trade the fifth section provides the background to the case at hand that is the evolution of free trade as a politico economic issue in canada the sixth section applies the expected utility model to the superficially puzzling case of canadian prime minister jean chretien s dramatic about face on the issue of trade liberalisation after coming to power in the final section the contributions of the model are reviewed along with directions for future research

explaining cooperation under anarchy hypotheses and strategies what circumstances favor the realization of mutual interests in the absence of centralized authority and through what strategies can nations foster the emergence of cooperation by altering the circumstances that they confront elementary game theory suggests three sets of conditions that serve as proximate explanations of the incidence of cooperation and discord i payoff structure mutual and conflicting preferences 2 the shadow of the future single play and iterated games and 3 number of players two person and n person games each of these three attributes of context may be subject to willful modification nations may create the preconditions for cooperation through strategies to alter payoffs lengthen the shadow of the future and reduce the number of actors required to realize limited mutual interests

policy rivalry among industrial states what can we learn from models of strategic trade policy the economic theory of international trade has changed dramatically over the last decade by admitting into its mainstream a body of literature that focuses on the implications of monopolistic and oligopolistic elements in international markets by applying the tools of the new industrial organization in an international context two new classes of models have emerged models of intra industry trade and models of strategic trade policy the policy implications of models of strategic trade policy were quite disturbing for the economics profession since these models demonstrated that the classical harmony between national and cosmopolitan welfare maximization does not exist if one assumes opportunities for strategic manipulation of oligopolistic international industries this article reviews two prominent models of strategic trade policy the brander spencer model and the krugman model and relates them to more familiar earlier concepts such as stackelberg s asymmetrical duopoly solution and the venerable infant industry argument for government intervention the primary purpose of this article however is to provide a synopsis of the large literature addressing the question of whether models of strategic trade policy can give guidance for government policy

understanding international trade policies an emerging synthesis the international trade problems of the 1980s stimulated an expansion of scholarship on trade policies by economists and political scientists at least four distinct theoretical perspectives weave their way through recent literature that concentrates on the united states emphasizing market conditions policy beliefs and values national political institutions and global structures respectively new studies in each of these traditions advance beyond the work of their predecessors but none of the perspectives has yet proved adequate as a single unifying vehicle nevertheless we can also see clear movement toward a synthesis with single works blending insights from several traditions thus the books under review do not all fall neatly into the familiar exclusive categories of economics or political science the emerging synthesis needs strengthening in several ways including the development of conditioning hypotheses that will reduce remaining apparent confusions

the international negotiation game some evidence from the tokyo round this paper examines the tokyo round negotiation 1973 1979 under various cooperative game solution concepts out of the many tariff cutting proposals in the tokyo round the swiss proposal was finally agreed upon by all major players the choice of the swiss proposal suggested that egalitarian considerations are important for this type of cooperative game since the kalai smorodinsky solution the shapley value modified and the nucleolus solution have this egalitarian property they all predict the outcome of the negotiation very well this paper investigates the types of cooperative game solution concepts that best describe the tariff reduction negotiations in the tokyo round 1973 1979 since the objective is to infer the type of game that can closely model the actual negotiation the best game concept for our purposes is the one which predicts the actual outcome the swiss tariff cutting formula most successfully under periodic resurgence of protectionist ideology as occurred during the tokyo round negotiations there are various cooperative solution concepts some emphasize the egalitarian nature of the outcome some the efficiency nature of the outcome and some emphasize both aspects see section ii the present paper concludes that when the change in a country s trade balance becomes an important consideration for negotiators the egalitarian aspect emerges as the most important cooperative game solution concepts an interesting finding of the present paper is the bargaining powers of the four major players united states eec japan and canada were roughly equal as shall be explained this is because each of these players was equally destructive to the tokyo round negotiation there are currently four simulation studies on the impacts of the tokyo round deardorff and stern 1983 baldwin et al 1980 brown and whalley 1980 and cline et al 1978 the present paper uses the simulation studies by cline et al for our analysis for three reasons 1 the brookings study is based on keynesian short run impacts of the tokyo round which seems to fit the objectives of negotiators 2 it represents the most complete welfare analysis of various proposals and 3 it was the most influential study done around that time perhaps it can reflect the conventional wisdom of negotiators in that period the present paper is organized as follows section i discusses the basic assumptions section ii examines various game solution schemes or concepts section iii presents the case of the five major proposals section iv extends the result of section iii to twelve proposals section v discusses the robustness of various assumptions followed by a conclusion in section vi

rational hegemons excludable goods and small groups an epitaph for hegemonic stability theory in defining international free trade as a public good hegemonic stability theory posited early in the 1970s that its reliable supply depended upon a distribution of international power analogous to that within a privileged group more recently however critics have challenged three assumptions fundamental to hegemonic theory its premises of free trade public goods and privileged groups they have concluded that hegemony is not necessary for and indeed may be antithetical to a stable world economy based on market exchange the author argues that the critics overstate their case the assumptions they attack allow hegemonic theory to represent analytically several critically important barriers to free trade among states among these are the existence of strategic interdependence among the actors and the prevalence of informational asymmetries the most significant flaw in hegemonic theory is its neglect of the essence of the domain to which it applies the politics of inter state trade in an anarchic world

the economics of wildlife farming and endangered species conservation abstract there is growing concern that the traditional protectionist approach to conservation is expensive and insufficient to deliver the desired environmental outcomes supply side policies to conserve endangered species have drawn support by generating supplies from captive bred animals wildlife commodity prices are expected to fall thereby lowering the incentive to poach species in the wild supply side policies however often neglect the institutional framework within which the wildlife trade takes place and ignore the potential strategic responses of economic agents adopting a model that captures imperfect competition between traders and farmers we analyze the effect of supply side policies and conclude that under some circumstances these policies may contribute to further devastation of wild stocks we derive conditions under which captive breeding contributes to conservation and discuss implications for policy makers

unfair trade practices the case for a differential response trade distorting practices by other states did not seriously affect u s commercial interests until the mid 1960 s however growing overall and sectoral trade deficits as well as rapid changes in trading patterns have made such practices a more salient political issue the modal and preferred american policy response has been to rely on u s supported liberal institutions notably the general agreement on tariffs and trade gatt to provide a framework for multilateral negotiations designed to eliminate

international institutions and economic sanctions economic sanctions have long occupied the attention of both scholars and policy makers despite the widespread use of sanctions many observers have concluded that the inherent problems associated with imposing sanctions involving multiple senders substantially limit their effectiveness this article reviews two books that analyze the factors that influence cooperation among senders of multilateral sanctions these books indicate that international institutions can do much to promote cooperation of this sort however this essay argues that the extent to which international institutions facilitate cooperation among senders of sanctions is likely to depend on the domestic politics of members the type of institution being used for this purpose the nature of the strategy being pursued and the distribution of power among members although these books make significant contributions to our understanding of the factors that promote cooperation among senders of multilateral sanctions they examine the factors that promote the effectiveness of sanctions in only a peripheral manner one potential influence on the effectiveness of sanctions that are organized by an international institution however is the likelihood that the institution will be captured by member states or by interest groups within them additional research that investigates the conditions under which international institutions are likely to be captured and the implications of institutional capture for their performance may therefore prove useful to scholars of international relations and economic statecraft

power politics and international trade r recent literature attributes the relative scarcity of open international markets to the prisoner s dilemma structure of state preferences with respect to trade we argue that the prisoner s dilemma representation does not reflect the most critical aspect of free trade agreements in an anarchic international system namely their security externalities we consider these external effects explicitly doing so leads us to two conclusions 1 free trade is more likely within rather than across political military alliances and 2 alliances are more likely to evolve into free trade coalitions if they are embedded in bipolar systems than in multipolar systems using data drawn from an 80 year period beginning in 1905 we test these hypotheses the results of the analysis make it clear that alliances do have a direct statistically significant and large impact on bilateral trade flows and that this relationship is stronger in bipolar rather than in multipolar systems in the early 1970s students of international relations began what would become a long and heated debate about the political correlates of open international markets recently however an important element of consensus has begun to emerge most contributors to this debate now seem to agree that the prisoner s dilemma structure of state preferences with respect to trade explains the relative dearth of open international markets here we argue that what has become the standard prisoner s dilemma representation neglects the most critical aspect of free trade agreements in the anarchic international system namely their security externalities we consider these external effects explicitly in order to do so we construct and analyze a simple game theoretic model the results of this analysis demonstrate that tariff games between allies differ systematically from those played between actual or potential adversaries these differences imply that free trade is more likely within rather than across political military alliances however our analysis also suggests that the evolutionary prospects of alliances vary those that are the products of bipolar systems are more likely to evolve into free trade coalitions than are their multipolar counterparts less credible exit threats and clearer responsibilities for alliance stability explain the advantage of a bipolar system we test this argument using data drawn from an 80 year period beginning in 1905 the empirical analysis supports our argument it demonstrates that alliances have a direct statistically significant and large effect upon bilateral trade moreover it shows that on average alliances have a much stronger effect on trade in a bipolar than in a multipolar world 2

selection and influence interest groups and congressional voting on trade policy studies of the effects of interest groups on congressional roll call voting typically view party and ideology as competing factors and rely on a factoral model of interests or a sectoral model including only interest groups with a direct stake in the vote we depart from that strategy in several ways we define interest groups at the level of standard industrial classification two digit codes and observe the universe of interests for 1979 90 we use measures of geographically and nongeographically based economic interests to estimate the representative s party and ideology we also consider the factor endowments of individuals within a district to examine their impact on floor votes we then investigate the influence of these interests on members party affiliation and ideology as well as a pool of five floor votes on foreign trade using instrumental variables for party and ideology economic interests account for a substantial portion of the variance in all cases and models that also include other explanatory variables are highly accurate in estimating floor votes

reputation and imperfect information abstract a common observation in the informal literature of economics and elsewhere is that is multistage games players may seek early in the game to acquire a reputation for being tough or benevolent or something else but this phenomenon is not observed in some formal game theoretic analyses of finite games such as selten s finitely repeated chain store game or in the finitely repeated prisoners dilemma we reexamine selten s model adding to it a small amount of imperfect or incomplete information about players payoffs and we find that this addition is sufficient to give rise to the reputation effect that one intuitively expects

hegemonic stability theory and 19th century tariff levels in europe although the theory of hegemonic stability has attracted an impressive array of adherents current formulations leave many conceptual issues unresolved existing formulations also fail to draw from the theory any implications concerning the process by which a hegemonic state creates and maintains a regime as an example great britain is generally agreed to have been hegemonic in the nineteenth century but britain s behavior was generally inconsistent with that implied by a theory of hegemonic stability i advance an alternative set of explanations for changes in international tariff levels based on the notion of a political business cycle

common stochastic trends in international stock markets abstract this paper presents evidence concerning the number of common stochastic trends in the equity markets of the u s japan england germany and canada monthly and quarterly data from january 1974 through august 1990 on morgan stanley s capital international indices are used to compute johansen 1990 tests for common trends the results indicate the presence of a single common trend driving these countries stock markets estimates of the factor loadings suggest that this trend is most important in the japanese market and least important in the canadian market to interpret this evidence the paper demonstrates that under weak conditions the unit root and cointegration structure of stock prices should mirror the unit root and cointegration structure of their dividend payments the paper tests this prediction by constructing national dividend series from capital international s dividend yield data as well as by using gnp data as with stock prices the evidence points to a single common trend although the stochastic properties and relative importance of this trend differs somewhat from the trend in stock prices

sectoral conflict and foreign economic policy 1914 1940 the period from 1914 to 1940 is one of the most crucial and enigmatic in modern world history and in the history of modern u s foreign policy world war i catapulted the united states into international economic and political leadership yet in the aftermath of the war despite grandiose wilsonian plans the united states quickly lapsed into relative disregard for events abroad it did not join the league of nations disavowed responsibility for european reconstruction would not participate openly in many international economic conferences and restored high levels of tariff protection for the domestic market only in the late 1930s and 1940s after twenty years of bitter battles over foreign policy did the united states move to center stage of world politics and economics it built the united nations and a string of regional alliances underwrote the rebuilding of western europe almost single handedly constructed a global monetary and financial system and led the world in commercial liberalization

the sterling dollar franc triangle monetary diplomacy 1929 1937 the late interwar years encompass a full spectrum of international monetary conflict and cooperation why did great britain france and the united states cooperate in some periods and not in others first the transience of monetary cooperation and conflict is explained in part by inherent characteristics of gold exchange and floating monetary systems second environmental changes swings between prosperity and depression between peace and the threat of war and between monetary orthodoxy and inflationist heresy altered the strategic setting confronting the central monetary powers third the actions of governments both followed from and shaped the circumstances that they confronted through strategies of composition across issues and decomposition across time and actors nations deliberately fostered the emergence of cooperation by altering the context of monetary diplomacy

the ivory trade ban is it effective abstract this paper examines the effectiveness of the ivory trade ban when producer and consumer states have different incentives to comply with such a ban the paper distinguishes between two types of producer states those with stable elephant population and those with declining elephant population we compare the independent enforcement level of each of these producer states and a consumer state and show the suboptimality of these levels compared to optimal enforcement level that would result from a cooperative effort the costliness and imperfectness of enforcing constraints on the private taking of elephants creates intergovernmental externalities thus in the absence of binding international law regulation would have to be supplemented with incentives

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

credible enticements can host governments tailor multinational firms organizations to suit national objectives abstract this article discusses the impact of host government policy inconsistency on multinational corporations relationships with local suppliers that benefit from public funding empirical findings suggest that such relationships suffer from transactions cost disadvantages due to concerns that unexpected losses of funding may cause the suppliers to demand new contracts the findings reflect statistical tests on a structural equation latent variable model using data from a survey of 111 affiliates of mncs operating in 36 countries

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

the concentration of capabilities and international trade over the course of the previous two decades political scientists have become increasingly interested in the relationship between international politics and global trade much of the literature on this topic centers on the effects of a hegemonic distribution of power on commerce hegemonic stability theorists argue that hegemony is a necessary condition for the existence of a liberal economic order and that in the absence of a hegemon a liberal international economy is particularly difficult to establish and maintain however a growing number of theoretical and empirical critiques have been leveled against the gemonic stability theory and the issue of whether hegemony helps shape patterns of global trade continues to be the topic of heated debate

trade policy and the american income distribution p revious studies of the effects of u s tariffs and quotas on u s real income and its distribution have concluded that these effects are minimal moreover this conclusion has emerged from both partial equilibrium and general equilibrium2 approaches however most of these studies assumed labor to be the only variable factor this study combines a general equilibrium methodology with a significant degree of disaggregation by using the 83 sector united states input output table and a linear programming approach3 to assess the impact of the 1967 structure of u s tariffs and quotas on the american functional income distribution we conclude that when all factors are perfectly mobile the effects on aggregate real income and its distribution are much greater than previously found and these effects are highly sensitive to the degree of mobility assumed section ii presents the critical assumptions of the model and contrasts them with those of the other models section iii contains a discussion of the data and section iv draws our conclusions ii the model4

regulation of international trade in the united states the tokyo round a model based on the economic theory of regulation is used to explain the interindustry pattern of tariff protection that emerged from the tokyo round although tariff reductions were modest and were conducted in large part using a harmonization tariff cutting formula evidence reported here suggests that domestic pressure groups were able to exercise influence over post tokyo round tariff levels results of this analysis provide support for the marvel ray tariff formation model copyright 1987 by the university of chicago

dynamic stock market covariances in the eurozone abstract this paper examines the short term dynamics macroeconomic sensitivities and longer term trends in the variances and covariances of national equity market index daily returns for eleven countries in the euro currency zone we modify colacito engle and ghysel s mixed data sampling dynamic conditional correlation garch model to include a new scalar measure for the degree of correlatedness in time varying correlation matrices we also explore the robustness of the findings with a less model dependent realized covariance estimator we find a secular trend toward higher correlation during our sample period and significant linkages between macroeconomic and market wide variables and dynamic correlation one notable finding is that average correlation between these markets is lower when their average gdp growth rate is lower or when more of them have negative gdp growth

growth waves systemic openness and protectionism there is a distinctively repetitive quality about trade policy problems domestic economic growth slows producers seek protection against foreign competitors and national decision makers raise barriers to trade while at the same time criticizing their counterparts in other governments for engaging in similar practices because trade is one of the more important topics in international and comparative political economy and because this scenario has played itself out more than a few times it is not surprising that a number of theorists have sought to model the underlying processes thought to produce movements toward and away from protectionism by now a variety of different types of approaches ranging from the cognitive to the systemic have been tried systemic structure ideas and ideology surplus capacity business cycles and shifts in elite orientation and domestic coalitions in response to external crises have been emphasized as principal theoretical foci our position is that the different levels of analysis and alternative foci all have merit and utility what they lack is an appreciation for the underlying systemic processes that link together these various facets of the political economy we seek to develop a theoretical argument that explicates these underlying processes the argument centers on recurring growth waves characterized in alternating pattern by the ascent of system leaders and the subsequent successful attempt of technological followers to catch up with the leaders the downturns of the growth waves produce conditions favoring protectionism but we contend the form and the intensity of protectionism that are likely to be produced will depend on which of the two types of growth waves is in progress ascent waves are characterized by the emergence of new technological leaders and a consequent increase in the gap between the leaders and the technological followers during the periods of structural transition and intense

the political economy of the tariff cycle how can protectionism and free trade succeed one another our answer focuses on the changing balance of private actors political demands these actors acquire interests in tariff policies because their assets are spatially concentrated and trade in these assets is subject to various limitations actors in regions experiencing no new investment in an established industry old regions have interests that sometimes differ from those in regions where there is new investment we show that old regions have no reason to be involved in tariff politics at business cycle peaks during troughs whether a state becomes more or less protectionist depends ceteris paribus on the relative political strength of old import competing and old exporting interests if old import competing industries outweigh the old exporters then protection will tend to increase at the trough and decrease at the peak of a business cycle the opposite result occurs when old exporters are more influential

cooperation in the liberalization of international trade after hegemony what nations dwell in perpetual anarchy for no central authority imposes limits on the pursuits of sovereign interests because as states they cannot cede ultimate control over their conduct to an supranational sovereign they cannot guarantee that they will adhere to their promises the possibility of a breach of promise can impede cooperation even when cooperation would leave all better off yet at other times states do realize common goals through cooperation under anarchy

the political economy of nontariff barriers a cross national analysis nontariff barriers to trade are most pervasive when deteriorating macroeconomic conditions give rise to demands for protection by pressure groups when countries are sufficiently large to give policymakers incentives to impose protection and when domestic institutions enhance the ability of public officials to act on these incentives statistical results based on a sample of advanced industrial countries during the 1980s support the argument that the incidence of nontariff barriers tends to be greatest when the preferences of pressure groups and policymakers converge more attention should be devoted to the interaction between societal and statist factors in cross national studies of trade policy

the euro and capital markets a new era this paper is organised as follows section 2 examines the forces that have changed the financial landscape at the world level over the last two decades section 3 summarises the arguments of how the introduction of the euro should add to these broader economic forces in reshaping euro financial markets section 4 verifies whether the actual experience since january 1999 has been in line with the ex ante expectations most of the analysis will be based on developments of the bond market section 5 offers some conclusions

firms governments and wto adjudication japan s selection of wto disputes what explains the selection of cases for wto adjudication this article explores the business conditions under which industries lobby their home government to use the wto adjudication process and the political factors that influence government decisions it explains the industry pattern of selection for international trade disputes as a function of the velocity of the business environment while wto adjudication is seen as costly and slow a positive ruling brings broad benefits in terms of deterrence against future discrimination firms in static industries will invest in wto dispute settlement to achieve these benefits but firms in industries shaped by dynamic competition have high opportunity costs that make them less willing to pursue adjudication this argument accounts for why there are fewer wto cases about electronics industry issues than there are likely incidences of protectionist measures since japan is a leading exporter and provides a government report with unique data on potential wto disputes it was chosen to test the argument in greater depth interviews with japanese business officials and statistical analysis of an original data set provide support for the argument the authors conclude that the passive attitude toward wto adjudication by japan s largest export industry electronics and the sensitivity of japan s diplomatic relations with china have constrained the cases that japan files these findings suggest that the effectiveness of the wto for dispute settlement is conditional upon the time horizon of the industry and the political relations among members

interests power and multilateralism multilateralism characterizes to varying degrees patterns of interaction among states and the formal organizations they construct the utility of multilateral norms or organizations varies with the type of cooperation problem states confront thus the functional logic of international cooperation leads to hypotheses about the conditions under which the institution of multilateralism may be a feasible and efficient solution as in coordination problems and those under which it will not as in collaboration problems within these constraints powerful states choose institutions that will serve their interests with multilateral arrangements becoming more attractive as the future is valued more highly multilateral institutions should be stable in circumstances of changing distributions of power relative to more hierarchical institutions the vulnerability of patterns of international cooperation to various exogenous changes depends on the type of strategic interaction underlying state behavior

international trade and agricultural development in developing countries significance of the uruguay round of gatt negotiations abstract liberalization of world trade in agricultural products ranks high on the agenda of the uruguay round after a period of more than six years however the negotiations have not been concluded nevertheless an outcome seems to be in sight the agreement will most likely not result in a move to freer trade it seems that domestic policies will become even more regulative than in the past in an attempt to cut exportable surpluses and to ease trade tensions among the main exporting nations this paper explores possible impacts of the gatt round on agricultural development in developing countries agricultural development is more than only growth in agricultural production or productivity however it is argued in the paper that other variables which also indicate agricultural development are often closely correlated with growth in production and productivity trade in agricultural products is not always an engine for agricultural development if internal divergences are not accounted for by appropriate domestic policies trade may be even harmful to agricultural development hence empirical research based on cross country analysis does not provide a clear answer about the role of trade for development past policies in industrialized countries have most likely had a negative effect on developing countries as a group however the effects differ widely across countries liberalization policies in industrialized countries would not just reverse these negative effects for developing countries price reduction in industrialized countries may not result in the often cited production decline in the short term present x inefficiency in agriculture will be reduced by liberalization leading to an outward shift of the supply curve hence liberalization may not lead to higher world market prices for temperate zone products in the short and medium term apart from this empirical models differ widely in the price effects they predict the expected outcome of the uruguay round increased regulation of domestic policies is likely both more negative for developing countries than past protectionist policies and worse than an overall liberalization world market prices will increase uncertainty and instability can be expected to grow and food aid may become less available there will be a need to react to these challenges with measures on the international and national level initiatives to deal with food crises in developing countries and to stimulate liberalization in developing countries should be considered finally developing countries should be made aware that their own domestic policies have a much greater economic impact than policies in other countries even if the latter are as protectionist as current agricultural policies in the industrialized world

an assessment of alternative methods of estimating the effect of the ivory trade ban on poaching effort the ban on international trade in ivory introduced by the international community in 1989 was intended to protect the declining stock of african elephant loxodonta africana by providing a barrier between the range state and the principal consuming nations if there is a residual trade then the efficiency of the ban is determined by the decline in the price paid to poachers and the responsiveness of poaching effort to changing prices this paper concentrates on the latter issue and provides a review of a number of alternative approaches to modelling poaching effort with extensions it is found that even low residual prices would induce a level of effort that would significantly depress elephant numbers

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

timing is everything elections and trade liberalization in the postcommunist world in the wake of the soviet bloc s collapse various postcommunist countries rushed to gain greater access to foreign markets many of them have made substantial progress in liberalizing commerce but the movement toward free trade has been by no means universal one prominent view is that the establishment of democratic institutions has stimulated economic reform in thepostcommunist world the authors conduct one of the first studies on this topic and find that democracies are indeed more likely to liberalize trade than nondemocracies they also find that the electoral calendar has a potent influence on the timing of commercial reform in postcommunist democracies controlling for a range of factors politicians are most likely to reduce trade barriers immediately after voters go to the polls trade liberalization is much less likely to occur at other points in a democracy s electoral calendar and elections have no effect on commercial reform in nondemocracies

determining the need for issue linkages in multilateral trade negotiations in multilateral trade negotiations trade offs usually are made within the issue areas that are on the agenda in the absence of cross issue trade offs linkages agreement may not be possible to maximize both the potential gains from trade and the scope for agreement negotiators need to be willing and able to consider the feasibility of issue linkages this raises the practical problem of determining when such trade offs are likely to be necessary although quantitative methods of policy analysis have been developed they have not been widely used by policymakers in part owing to the fact that negotiations focus largely on nontariff measures this article proposes a qualitative approach to the problem and applies it to the tokyo and uruguay round negotiations on safeguards to protect domestic industries from problems related to increases in imports

an open access fishery with rational expectations explain the evolution of the fish stock and the boat fleet as well as determine their equilibrium levels 2 while the changes in the fish stock are described by a biological rule entry and exit from the fishing industry are determined by how expectations are formed we examine a general model in which entry and exit are proportional to the present value of expected profits and compare two special cases of adaptive myopic expectations and rational expectations although both expectations mechanisms lead to the same equilibrium values they lead to different adjustment paths where expectations solely depend on current values myopic expectations it is well known that boats enter the fishery only when the fish stock is greater than its steady state stock 3 with rational expectations however boats may enter when the fish stock is much lower than its steady state value provided the boat fleet is sufficiently small this difference in adjustment is observable and in principle leads to an obvious test on how agents form expectations section 2 develops a general dynamic model for studying fisheries in section 3 we show that the model standardly used in the literature is equivalent to a myopic adaptive expectations model a rational expectations model is analyzed in section 4 the standard and rational expectations models are compared in section 5 section 6 illustrates this comparison using a simulation based on a schaefer model of the pacific halibut fishery section 7 presents the conclusions

alliances preferential trading arrangements and international trade c oncerns about the stability of the international trading system have become widespread in recent years many observers feel that the relatively liberal system forged after world war ii is being undermined by the proliferation of preferential trading arrangements these concerns have spawned a great deal of empirical research much of which has found that such arrangements exert a substantial effect on trade flows yet these studies have neglected the role political military alliances play in shaping patterns of commerce this omission is important because there is ample reason to expect that alliances guide trade flows and preferential trading arrangements often are comprised of allies as a result extant analyses risk confusing the effects of alliances and preferential trading arrangements on commerce and systematically overstating the effects of the latter in this study we analyze the effects of alliances and preferential trading arrangements on bilateral trade flows both factors are likely to promote trade among members but we argue that the interaction between them is central to explaining patterns of commerce the combination of an alliance which creates political incentives for participants to engage in trade and a commercial institution which liberalizes trade among members is expected to provide a considerable impetus to commerce among parties to both 1

explaining institutional change policy areas outside options and the bretton woods institutions i propose and test a theoretical framework that explains institutional change in international relations like firms in markets international institutions are affected by the underlying characteristics of their policy areas some policy areas are prone to produce institutions facing relatively little competition limiting the outside options of member states and impeding redistributive change in comparison institutions facing severe competition will quickly reflect changes in underlying state interests and power to test the theory empirically i exploit common features of the bretton woods institutions the international monetary fund and world bank to isolate the effect of variation in policy area characteristics the empirical tests show that despite having identical membership and internal rules bargaining outcomes in the bretton woods institutions have diverged sharply and in accordance with the theory

the complex interactions of markets for endangered species products economic models of trade in endangered species products often do not incorporate four focal arguments in the policy debate over trade bans 1 law abiding consumers may operate in another market separate from illegal consumers that trade would bring online 2 legal trade reduces stigma which affects demand of law abiding consumers 3 laundering may bring illegal goods to legal markets when trade is allowed 4 legal sales may affect illegal supply costs this paper analyzes systematically which aspects of these complicated markets separately or in combination are important for determining whether limited legalized trade in otherwise illegal goods can be helpful for achieving policy goals like reducing poaching

how did investor state dispute settlement get a bad rap blame it on nafta of course in the short history of the us bilateral investment treaty bit programme there have been no instances of dispute settlement cases initiated against the united states by firms from bit countries the nafta experience changed that where other studies have only hinted at the reasons for nafta controversies this paper makes clear three causal factors i changing patterns and intensity of fdi ii the application of those rules to developed countries amid those changing fdi patterns and iii ambiguities in isds rules themselves the paper explores these and traces the ways in which lessons of the nafta have been instrumental in changing the pursuit of investment protection agreements bits used to be uncontroversial but the nafta focused attention on reforms to isds that maintain the utility of bits in the governance of fdi without creating a legal structure for simply challenging the state

long waves technological innovation and relative decline the popularity of kondratieff long waves fluctuates according to the economic climate periods of slow growth help make long wave explanations more attractive while their popularity may oscillate the evidence associated with the existence of long waves continues to be disputed a review of the pertinent theoretical literature suggests that one reason for the disagreements about the existence of long waves is that much of the available evidence does not correspond as closely as it might to the theoretical foci a new data series one based on leading sector production growth rates from 1760 to 1985 is developed to remedy this lack of correspondence the appropriate analysis of this series requires that particular attention be paid to the rise and relative decline of the world economy s lead state the empirical outcome provides a close match to the long wave chronology developed by joseph schumpeter simon kuznets and j j van duijn while this approach falls short of bringing closure to many of the theoretical and empirical questions concerning long waves it does establish a solid empirical foundation for further analyses the article concludes with some observations on the long wave implications for the relative economic decline of britain in the nineteenth century and the united states in the twentieth century

from normalcy to new deal industrial structure party competition and american public policy in the great depression industrial partisan preference may be formally modeled as the joint consequence of pressures from labor and the differential impact of the world economy on particular businesses this basic and static model when extended to cover the money market can be used to examine questions of political development including the effects of fluctuations in national income on political coalitions american institutions and public policy during the new deal are used to test the theory against empirical evidence much of it from new primary sources the rise of the new deal coalition is traced to changes in the american industrial structure deriving from the boom of the 1920s and the reversal of the u s financial position that resulted from world war i in addition to the well known labor militancy of the 1930s the effect of these changes was the rise of a democratic political coalition dominated by capital intensive multinationally dominant firms and industries with a strong interest in free trade and a historically unprecedented ability to cope with major industrial upheavals without resort to force the major public policy initiatives of the new deal are reexamined from this standpoint

stock market synchronization and monetary integration abstract this paper focuses on the relationship between stock market comovements and monetary integration a panel specification is used to explain bilateral stock market return correlations between fifteen developed economies over the period 1975 2006 time fixed effects are included to capture global shocks and we also examine the role of bilateral trade linkages and international financial integration monetary integration leads to stronger stock market synchronization both through the elimination of exchange rate volatility and through the common monetary policy and the convergence of inflation expectations trade and financial integration also contribute to higher stock market return comovements

veto points veto players and international trade policy much of the literature on foreign economic policy focuses on the preferences of societal groups to explain policy decisions here however the author emphasizes the effects of domestic political i

unemployment in open economies the impact of trade finance and european integration this article compares variations in the level of unemployment in four small open economies austria belgium the netherlands and sweden rather than focusing on the political institutional differences between these four countries the article examines international economic variables such as the role of the european monetary system the structure of foreign trade and linkages to international markets to understand the greater deterioration of employment in belgium and the netherlands in turn the decision to join the european community and to seek firmer integration into financial markets is attributed to the relatively greater influence of banking capital or the financial sector in the systems of economic policy making of belgium and the netherlands the article concludes that the detachment of the austrian and swedish economies from the european experience in economic integration has greatly helped the social democrats in these countries in fulfilling their promises of full employment

u s trade threats rhetoric or war working paper 95 7 the international agricultural trade research consortium is an informal association of university and government economists interested in agricultural trade its purpose is to foster interaction improve research capacity and to focus on relevant trade policy issues it is financed by united states department of agriculture ers fas and csrs agriculture canada and the participating institutions

macroeconomic cycles and the stock market s reaction to monetary policy abstract this paper examines cyclical variation in the effect of fed policy on the stock market we find a much stronger response of stock returns to unexpected changes in the federal funds target rate in recession and in tight credit market conditions using firm level data we also show that firms that face financial constraints are more affected by monetary shocks in tight credit conditions than the relatively unconstrained firms overall the results are consistent with the credit channel of monetary policy transmission

introduction unipolarity state behavior and systemic consequences the united states emerged from the 1990s as an unrivaled global unipolar state this extraordinary imbalance has triggered global debate governments and peoples around the world are struggling to understand to how an american centered unipolar system operates and to respond to it what is the character of domination in a unipolar distribution to what extent can a unipolar state translate its formidable capabilities into meaningful influence will a unipolar world be built around rules and institutions or be based more on the unilateral exercise of unipolar power scholars too are asking these basic questions about unipolarity and international relations theory the individual contributions develop hypotheses and explore the impact of unipolarity on the behavior of the dominant state on the reactions of other states and on the properties of the international system collectively they find that unipolarity does have a profound impact on international politics international relations under conditions of unipolarity force a rethinking of conventional and received understandings about the operation of the balance of power the meaning of alliance partnerships the logic of international economic cooperation the relationship between power and legitimacy and the behavior of satisfied and revisionist states

tariffs and trade fluctuations does protectionism matter as much as we think despite the widespread assumption that tariffs reduce trade volume in the short term it is conceivable that long term expansion and contractions in trade actually drive tariff levels a granger causality analysis performed on british u s french german japanese and a systematic aggregate data on gdp tariff levels encompassing the 1854 1990 period finds mixed support for both the short and long term interpretations in general the antecedence of trade on protectionism predominates over the antecedence of protectionism on trade one implication is that the long term context should not be ignored in analyzing short term dynamics

u s soviet chinese relations routine reciprocity or rational expectations international relations theorists disagree about whether great power behaviors reflect bureaucratic routine or reciprocity recently some have suggested that these behaviors result from great powers rational expectations rather than from simple routine or reciprocity the debate is flawed in several respects the quasi experimental studies of great power behavior suffer from specification and measurement errors furthermore most studies of great power behavior focus exclusively on the superpowers without adequately appreciating china s role in world politics we present an improved analysis that recognizes the potential effects of chinese behavior and ameliorates the methodological flaws in existing work the results indicate that the behaviors of the united states the soviet union and china are a relatively stable mix of bureaucratic routine and reciprocity the results also indicate complex asymmetrical connections among u s soviet u s chinese and soviet chinese relations consistent with the notion of a strategic triangle

emu and european stock market integration the launch of the single currency in europe in january 1999 was preceded by a period of regulatory harmonization convergence in bond yields and inflation rates and strict fiscal policy across the eurozone countries we examine whether the 1990s also were characterized by increased stock market integration the results indicate that as forward interest differentials benchmarked against germany and inflation differentials benchmarked against the three best performing states shrank toward zero stock markets converged toward full integration the united kingdom a country that chose not to enter the eurozone shows no such increase in stock market integration

european equity market integration and joint relationship of conditional volatility and correlations abstract we analyse the integration patterns of seven leading european stock markets from 1990 to 2013 using daily data and mismatched monthly macroeconomic data to study the mismatch of data frequencies we use the dcc midas dynamic conditional correlation mixed data sampling technique developed by colacito engle and ghysels journal of econometrics 2011 we benchmark european integration patterns against the german stock market the reported integration patterns show a clear divide between large and relatively small equity markets short run and long run return correlations the small markets display higher short run european convergences than the large markets and vice versa the across the board divergence from greek risk during the crisis period is the most unambiguous conclusion of our study during this period cross country joint relationships of conditional variances and return correlations a convergence of risks resulting in global regional contagious spillovers are typically positive only exceptions are the german stock market s joint relationships

what drives european union stock market co movements abstract this paper analyses the co movements and contagion between 24 european union stock markets we apply a dynamic conditional correlation mixed data sampling model to extract short and long run correlations we use short term correlations to detect contagion finally we employ a gravity type regression to investigate the determinants of long term correlations first we find significant differences between the stock market co movements which seem to depend on economic development and market deepening moreover the time varying correlations emphasize different phases of development i e integration contagion and divergence second the contagion estimates reveal that during some crisis episodes the contagion is temporary while for other periods the contagion becomes more persistent indicating a herding behavior third the co movements determinants show that global factors and economic similarities are important in explaining correlations finally our findings on long term correlations drivers in contagion times are mixed revealing on the one hand a pure contagion that is not explained by fundamentals and on the other hand a wake up call in terms of cross border bank flows

issues and concerns in developing regulated markets for endangered species products the case of rhinoceros horns a proposal for addressing rhinoceros poaching is to legalise the trade in rhino horn and adopt a regulated market approach rma overturning the current trade ban this orthodox economic prescription aims to reduce incentives to poach endangered wildlife by driving down the market price of their products via auctioned stockpile releases biologists are clear however that securing a stockpile for some species needs biological success in captive breeding programmes cbps which varies markedly across species and habitats rhinoceros herds in a cbp would need spatially extensive terrain and costly permanent security measures and this only appears feasible for the less aggressive white rhino we argue that market price would actually need to be sustained at a high level to cover protection costs over the longer reproduction cycles in cbps and that without extensive monitoring and the correct institutional structures being in place legalising trade may encourage rather than prevent poaching supplementary policy measures that differentiate among consumer groups would also likely prove necessary

mature or emerging markets competitive duopoly investment decisions abstract we develop a competitive investment model wherein two competing firms consider investing into two projects targeting separately a mature and an emerging market the returns firms obtain from investments into these markets are assumed to follow an s shaped curve and depend on both firms actions considering symmetric environments in terms of investment opportunities we find that different forms of interactions may arise e g prisoner s dilemma and game of chicken and outline corresponding strategies that offer higher returns by exploiting first mover advantages cooperation opportunities and aggressive choices we also discuss the market conditions that can lead to these outcomes finally considering non symmetric environments we show that a firm may be better off when its competitor s budget increases

economic actors lobbying influence on the prospects for war and peace political scientists and economists have long been interested in the role of special interests in the policymaking process in the past few years a series of important new books have argued forcefully that the lobbying activities of economic actors have an important influence on the prospects for war and peace all of these analyses claim that whether economic actors enhance or decrease the likelihood of conflict ultimately depends on the domestic political balance between economic actors who have a strong vested interest in pushing for peace versus those that do not i advance two contrary arguments at least among the advanced states i posit there are no longer any economic actors who will be favorable toward war and who will lobby the government with this preference all of the identified mechanisms that previously contributed to such lobbying in these states have been swept away with the end of colonialism and the rise of economic globalization in particular i show that the current structure of the global economy now makes it feasible for foreign direct investment to serve as an effective substitute for conquest in a way that was not possible in previous eras my second argument concerns those economic actors in advanced states with a preference for peace i posit that it has become unnecessary for them to directly lobby the government to avoid war on economic grounds because economic globalization the accumulation of decisions by economic actors throughout the globe now has sufficiently clear economic incentives for leaders

economic effects of the tokyo round the conclusion of the tokyo round of multilateral trade negotiations mtn in april 1979 was an important milestone in international commercial diplomacy it marked the seventh round of multilateral reductions in international trade barriers negotiated under the general agreement on tariffs and trade gatt since world war ii tariffs on industrial products had last been reduced on a major scale in the kennedy round which concluded in 1967 and was implemented over the following five years tariffs are being reduced even further by the tokyo round the reductions being phased in over eight years beginning 1980 an even more noteworthy accomplishment of the tokyo round is the negotiation of a series of codes covering nontariff barriers ntbs depending on how these codes are interpreted and adhered to they will mean some significant reductions in ntbs and will clarify and harmonize government policies involving international trade this paper provides an economic analysis of the effects of the tokyo round it is organized as follows in section ii we examine the tokyo round negotiations including the initial tariffs by country and sector the tariff cutting procedure and tariff offers and the ntb codes in section iii we present the combined effects of the reductions in tariffs and ntbs calculated using the michigan model of world production and trade that we have developed for this and related purposes in section iv we consider the possible effects of ntb codes that we were unable to quantify and also look at trade policies that were excluded from the tokyo round in section v we offer concluding comments

sequencing regional trade integration and cooperation agreements trade integration agreements and other international cooperation agreements have proliferated in recent years around the world rather than being spurred by exogenous forces alone the two phenomena are likely to be both path dependent and endogenous to one another however the theoretical and empirical understanding of the relationships between agreements forged in different domains of cooperation remains nascent the purpose of this paper is to describe a new extensive dataset on international agreements that can be employed to start mending the gaps in the literature and to develop best practices of sequencing international agreements to obtain higher pay offs from cooperation of particular interest here is the relationship between trade integration and other cooperation agreements the data provide preliminary grounds for hypothesising that trade integration agreements can be a particularly likely catalyst for further cooperation between states

intra firm trade abstract the study analyses intra firm trade that is the estimated one third of world trade which is transacted between affiliated parties as firms realize the increasing potential for integrating their operations throughout the world they are contributing to significant shifts in the patterns of interntional trade and industrial development as emphasized here international trade is inextricably linked to the growing and substantial share of transactions between affiliated parties conveyed through multinational enterprises

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

optimal institutional arrangements for transboundary pollutants in a second best world evidence from a differential game with asymmetric players abstract this paper uses a dynamic model with asymmetric players to explore the question in a second best world should environmental regulations for transboundary pollutants be carried out locally or centrally we find that combined payoffs are larger with decentralized control if payoffs are sufficiently heterogeneous and initial pollution stocks are sufficiently small this result is obtained because the central authority applies one shadow price to pollution i e it uses uniform standards whereas local authorities use different shadow prices and therefore different standards

the optimal number of firms in the commons a dynamic approach we consider a common property resource sold in imperfectly competitive markets there is a dynamic externality current harvests lower future stocks raising future harvest costs and a static crowding externality increasing industry size raises costs but lowers prices thus it has ambiguous welfare effects the optimal industry size typically changes over time so that a first best outcome cannot be obtained with a fixed number of firms single firm exploitation is optimal only under special circumstances the socially optimal open loop steady state industry size corresponds to the static optimum both generally differ from the closed loop steady state optimum

negotiation arithmetic adding and subtracting issues and parties students of international negotiations often examine strategic interactions among a given set of parties dealing with a specified group of issues the issues and parties themselves are often choice variables whose ultimate configuration can have decisive effects on a bargain s outcome using a variety of international cases i investigate the properties of several classes of moves that are intended to alter the issues and parties of an original negotiation a unified approach to the analysis of such situations suggests numerous distinct means by which the addition or subtraction of issues can yield one sided gains to the use of power can yield joint gains that create or enhance a zone of possible agreement and can reduce or destroy a zone of possible agreement the effects of adding or subtracting parties are similarly analyzed however unintended complexity unforeseen interrelationships organizational considerations transactions costs and informational requirements may alter the analysis of such moves

reputation and hegemonic stability a game theoretic analysis we develop and explicate a game theoretic model in which repeated play incomplete information and reputation are major elements a significant advance of this model is the way it represents cooperation under incomplete information among rational actors of different sizes the model is used to formalize certain aspects of the theory of hegemonic stability it shows that the dilemma or limits of hegemonic stability look like natural attributes of games where reputation is involved unifying both benevolent and coercive strands of hegemony theory an example drawn from recent developments in the organization of petroleum exporting countries shows how our model of reputation guides the study of hegemonic regime construction we conclude by comparing the nature of cooperative behavior under conditions of complete and incomplete information

taxation and the political economy of the tariff traditional accounts of u s tariff policy emphasize trade strategies and interest group politics this article makes a departure it opens with an observation up until world war i the tariff was the largest single source of federal government revenues it then explores the significance of tariffs as taxes theoretically and empirically in its first part the article develops a theory of taxation politics and applies it to the tariff in its second part it submits the theory to an empirical test modeling changes in u s tariff rates from 1829 to 1940 the politics of tariff revision it argues followed from two characteristics of the tariff as tax from the extent of the treasury s dependence upon it and from the distributive pattern of its burdens and benefits taken together the article concludes revenue dependence and distributive incidence account for several diverse aspects of american tariff policy including the structure of its coalitions the shifts in its objectives and the timing of its innovations

global communications and national power life on the pareto frontier regime analysis has focused on issues of market failure the resolution of which depends upon knowledge and institution building global communications regimes however have been concerned either with issues of pure coordination or with coordination problems with distributional consequences outcomes have been decided by the underlying distribution of national power in those areas where power was asymmetrically distributed and there was no agreement on basic principles and norms radio broadcasting and remote sensing no regime was formed in those areas where distributional issues could not be unilaterally resolved allocation of the radio spectrum and telecommunications regimes were created although both principles and rules changed with alterations in national power capabilities

breaking with orthodoxy the politics of economic policy responses to the depression of the 1930s under the same systemic shock the collapse of the international economy in 1929 different countries formulated different policy responses britain germany the united states france and sweden all began by attempting the orthodoxy of deflation soon after they abandoned deflation devalued their currencies erected tariff barriers and set up corporatistic production and marketing arrangements a few countries went further and began experimenting with demand stimulus fiscal policy the most successful was nazi germany the swedish and u s efforts were much more limited and less effective the french attempt crumbled in less than a year and britain never tried demand stimulus why this divergence in policy the politics of policy response the societal basis of different policy coalitions and the way in which they were expressed through different political formulations suggests an answer in all countries labor agriculture and certain elements of business became available for revolts against policy orthodoxy what differed across countries was the specific balance of forces among these interest groups and the political factors that shaped their combinations the effect of political leadership institutions and other variables on outcomes depended critically on the way specific social forces in each society used and worked through them

a world economy restored expert consensus and the anglo american postwar settlement although british and u s officials held markedly different views during the initial negotiations for a postwar economic order they were able to reach watershed trade and monetary agreements that set the terms for the reestablishment of an open world economy how does one explain this anglo american settlement reached at bretton woods in 1944 structural explanations based on underlying configurations of power and interests are helpful but leave important issues unresolved given the range of postwar economic orders that were possible and potentially consistent with underlying structures and also given the divergent and conflicting views both within and between the two governments why did the economic order take the particular shape it took this article argues that agreement was fostered by a community of british and american economists and policy specialists who embraced a set of policy ideas inspired by keynesianism and who played a critical role in defining government conceptions of postwar interests shaping the negotiating agenda for example shifting the focus of negotiations from trade issues which were highly contentious to monetary issues about which there was an emerging middle ground created by keynesian ideas and building coalitions in support of the postwar settlement