Inequity Aversion and the International Distribution of Trade Protection

One important puzzle in international political economy is why lower‐earning and less‐skilled intensive industries tend to receive relatively high levels of trade protection. This pattern of protection holds across countries with vastly different economic and political characteristics and is not well accounted for in existing political economy models. We propose and model one possible explanation: that individual inequity aversion leads to systematic differences in support for trade protection across industries. We conduct original survey experiments in China and the United States and provide strong evidence that individual policy opinions about sector‐specific trade protection depend on the earnings of workers in the sector. We also present structural estimates that advantageous and disadvantageous inequality influence support for trade protection in the two countries.     

Corporate interests and public affairs: organised business–government relations in EU member states

The internationalisation of economic and political affairs changes the way in which business interests are brought to bear on public policy. This is a global phenomenon but can, in particular, be observed in Europe. The construction of the European Union, the development of the Single Market and the build‐up of the policy institutions to go with it, together change business–government relations profoundly. This paper answers the question of how organised business interests relate to government agencies and political institutions. By using the example of trade associations in the Netherlands and Germany, the paper shows that, despite the internationalisation of public affairs in Europe, the national political level remains strategically important for the representation of business interests. The paper thus argues that changes in European business–government relations are institutionally embedded at both the European and the national level. The implication for future research is that much of the dynamics of economic and political internationalisation materialises within the domestic arrangements of interest politics. Copyright © 2004 Henry Stewart Publications     

Corporate interests and public affairs: organised business–government relations in EU member states

The internationalisation of economic and political affairs changes the way in which business interests are brought to bear on public policy. This is a global phenomenon but can, in particular, be observed in Europe. The construction of the European Union, the development of the Single Market and the build‐up of the policy institutions to go with it, together change business–government relations profoundly. This paper answers the question of how organised business interests relate to government agencies and political institutions. By using the example of trade associations in the Netherlands and Germany, the paper shows that, despite the internationalisation of public affairs in Europe, the national political level remains strategically important for the representation of business interests. The paper thus argues that changes in European business–government relations are institutionally embedded at both the European and the national level. The implication for future research is that much of the dynamics of economic and political internationalisation materialises within the domestic arrangements of interest politics. Copyright © 2004 Henry Stewart Publications     

Intra-industry trade and protectionism: the case of the buy national policy

This article examines the factors that lead governments to open up their public procurement markets to international competition with a particular emphasis on the effect of intra-industry trade. Contrary to the conventional notion that intra-industry trade entails less political pressure for protectionism than inter-industry trade, I argue that such notion does not prevail in the case of discriminatory public procurement. Firms in a market with a high degree of intra-industry trade are more likely to resist the removal of discrimination than would firms in a market with a high degree of inter-industry trade. Empirically, I find support for the argument both at sub-national and cross-national settings.     

Demokratie, Autokratie und die regulative Gestaltung der Außenwirtschaftsbeziehungen in Entwicklungsländern

This paper investigates into the political determinants of trade policy regulation in developing countries. When choosing between the trade policy instruments tariffs and quota governments consider the effects of these policies on their political support from interest groups and voters. It is argued that quantitative restrictions become increasingly less attractive as a country democratizes. Instead, motives of revenue generation gain importance. Therefore, the likelihood of democratic governments choosing quota is smaller than for their autocratic counterparts. Empirical tests based on a sample of 75 developing countries for the years 1979–1998 support the hypothesis.     

The Politics of Foreign Direct Investment into Developing Countries: Increasing FDI through International Trade Agreements?

The flow of foreign direct investment into developing countries varies greatly across countries and over time. The political factors that affect these flows are not well understood. Focusing on the relationship between trade and investment, we argue that international trade agreements—GATT/WTO and preferential trade agreements (PTAs)—provide mechanisms for making commitments to foreign investors about the treatment of their assets, thus reassuring investors and increasing investment. These international commitments are more credible than domestic policy choices, because reneging on them is more costly. Statistical analyses for 122 developing countries from 1970 to 2000 support this argument. Developing countries that belong to the WTO and participate in more PTAs experience greater FDI inflows than otherwise, controlling for many factors including domestic policy preferences and taking into account possible endogeneity. Joining international trade agreements allows developing countries to attract more FDI and thus increase economic growth.     

Postliberalism: The New Centre Ground of British Politics

Brexit and support for anti‐establishment insurgencies suggest that British politics is moving away from the old left–right opposition towards a new divide between the defenders and detractors of progressive liberalism. As this article suggests, progressive liberalism differs significantly from both classical and new liberalism. It fuses free‐market economics with social egalitarianism and identity politics. Both the hard left and the radical right reject this combination and want to undo a number of liberal achievements. British politics is also moving in a postliberal direction. In the economy, postliberalism signals a shift from rampant market capitalism to economic justice and reciprocity. In society, it signals a shift from individualism and egalitarianism to social solidarity and fraternal relations. And politically, it signals a shift from the minority politics of vested interests and balkanised group identity to a majority politics based on a balance of interests, shared identity and the embedding of state and market in the intermediary institutions of civil society. This article argues that postliberalism is redefining Britain's political centre ground in an age where neither progressive liberalism nor reactionary anti‐liberalism commands majority support. First, it charts the ascendancy of progressive liberalism over the past quarter‐century. Second, it contrasts anti‐liberal reactions with postliberal alternatives, before exploring why earlier iterations of postliberalism failed to gain traction with the political mainstream. Third, it provides a discussion and critique of Theresa May's postliberal conservatism, notably the tension between free‐market globalisation and free trade, on the one hand, and the support for national industry and the indigenous working class, on the other.     

The rise and fall of decentralization: A comparative analysis of arguments and practices in European countries

This paper addresses the arguments in favour of both the decentralization and centralization of public policy making. It points out that the same arguments are sometimes used to advance either claim and that in different countries opposite arguments are used to support the same claim. Clearly, the inherent features of centralization and decentralization are far from obvious. A closer look at the attention given to the issue by political parties at the national level in four European countries reveals that decentralization becomes an issue in these countries at different periods and as a cause of different arguments, which rather reflect the dominant values in the political culture than refer to inherent properties of decentralization itself. An analysis of opinions of local elites points at the relation between their opinion on decentralizing responsibilities in a specific field and the support for existing institutional arrangements, their own influence in the policy field and the predisposition towards decentralization tendencies. This results in the conclusion that the support for decentralization tendencies is more closely related to existing specific institutional arrangements, and to the degree to which it is expected to influence one's own position, than to its inherent merits.     

The rise and fall of decentralization: A comparative analysis of arguments and practices in European countries

Abstract This paper addresses the arguments in favour of both the decentralization and centralization of public policy making. It points out that the same arguments are sometimes used to advance either claim and that in different countries opposite arguments are used to support the same claim. Clearly, the inherent features of centralization and decentralization are far from obvious. A closer look at the attention given to the issue by political parties at the national level in four European countries reveals that decentralization becomes an issue in these countries at different periods and as a cause of different arguments, which rather reflect the dominant values in the political culture than refer to inherent properties of decentralization itself. An analysis of opinions of local elites points at the relation between their opinion on decentralizing responsibilities in a specific field and the support for existing institutional arrangements, their own influence in the policy field and the predisposition towards decentralization tendencies. This results in the conclusion that the support for decentralization tendencies is more closely related to existing specific institutional arrangements, and to the degree to which it is expected to influence one's own position, than to its inherent merits.     

From 'welfare without work' to 'buttressed liberalization': The shifting dynamics of labor market adjustment in France and Germany

Abstract.  During the past decade, prevailing scholarship has portrayed France and Germany as suffering from a persistent syndrome of 'welfare without work' entailing a vicious circle between stubbornly high rates of unemployment and non-wage labor costs. Scholars blame this disease on dysfunctional political arrangements, deep insider-outsider cleavages and failed systems of social partnership. As a result, the two countries are said to be more or less permanently mired in a context of high unemployment that is highly resistant to remediation. This article departs from this conventional wisdom in two important respects. First, it argues that France and Germany have undertaken major reforms of their labor market policies and institutions during the past decade and remediated many of their longstanding employment traps. Second, it shows that the political arrangements that adherents of the 'welfare without work' thesis identify as reasons for sclerosis have evolved quite dramatically. The article supports these arguments by exploring some of the most significant recent labor market reforms in the two countries, as well as the shifting political relationships that have driven these changes. In both countries, recent labor market reforms have followed a trajectory of 'buttressed liberalization'. This has involved, on the one hand, significant liberalization of labor market regulations such as limits on overtime and worker protections such as unemployment insurance. On the other hand, it has entailed a set of supportive, 'buttressing' reforms involving an expansion of active labor market policies and support for workers' efforts to find jobs. The article concludes that these developments provide reasons for optimism about the countries' economic futures and offer important lessons about how public policy can confront problems of labor market stagnation.     

Electoral Competition and Agricultural Support in OECD Countries

Agricultural trade protectionism in developed countries remains a politically charged issue, yet few studies have attempted to explain the political dynamics behind this important trade issue. We consider agricultural subsidies as a type of distributive policy that targets the agricultural sector at the expense of consumers and taxpayers. Based on Cox (1987, 1990) and Myerson (1993) , we argue that electoral systems that encourage politicians to appeal to a narrow constituency tend to have a higher level of agricultural support. We test this theoretical hypothesis using OECD agricultural support data disaggregated by commodity and country. A cross-classified multilevel model is employed to account for complex variation of agricultural support across countries, commodities, and time. Our empirical results show that electoral systems that encourage politicians to target narrow (broad) constituencies are associated with relatively high (low) levels of agricultural subsidies.     

Trade unions for EMU: Sectoral preferences and political opportunities

Surveys conducted on the political economy of Europe's Economic and Monetary Union have seldom considered the response of domestic interest groups, notably trade unions. This article contrasts and explains the positions on EMU adopted by major British, French and German trade unions, in the process reassessing the so‐called interest group approach to preference formulation. It is argued that while the impact of sectoral orientation appears significant, it is mitigated by the intervention of ideological and institutional factors. On a substantive level, unions turned out to be broadly supportive of what many had labelled a ‘monetarist’ project. If as is often argued, social and political cohesion is needed for monetary union to endure, this represents an important development.     

Multilateralising regionalism: what role for the Trans-Pacific Partnership Agreement?

Abstract

The Asia-Pacific region is home to a large and rapidly growing number of preferential trade agreements (PTAs). These agreements differ widely in design, scope and purpose. The “noodle bowl” that has resulted runs the risk of distorting investment and trade. Neither global institutions (the WTO) nor regional institutions such as the Asia Pacific Economic Cooperation (APEC) grouping have successfully addressed these issues. Amidst this increasingly messy situation, the proposed Trans-Pacific Partnership (TPP) agreement stands out for a range of important economic and political reasons, not least of which is its potential to take existing PTAs in the Asia-Pacific region in a new direction. The aim of the TPP negotiators is to produce a comprehensive, high quality, multi-party agreement to tame the tangle of PTAs and be a potential stepping stone to achieving the goal of liberalizing regional trade on a non-discriminatory basis. The economic gains from removing border barriers among the countries involved in the initial TPP negotiations are likely to be limited, however, given the small size of many of the economies and the existing PTAs among them. To date, the US has been unwilling to offer a single set of arrangements for all TPP partners, preferring to build on existing bilateral agreements. Pessimism about the immediate results from the TPP should be tempered, however, by considerations of the dynamics that it might set in train; on the other hand, it has the potential to divide the region and exacerbate China's concerns about “containment”.     

Free Trade: A Paradox for Democracy

Free trade and global markets are issues that have dominated for some time the political and economic agendas of both industrialized and newly developing nations. While greater prosperity for all peoples is most frequently cited as the main gain, free trade is also considered a promoter of democracy, an argument deployed in bringing China into the World Trade Organization. World peace has also been cited as one of the fruits of closer economic integration, as parochial walls between peoples are undermined, interdependence grows and is made more transparent, and mutual prosperity assured. We contest the faith upon which these assumptions rely. We argue that the theory and practice of neo-liberal free trade and neo-revisionist democracy implicate the modern democratic nation state in paradoxes that it is ill-equipped to negotiate. To exit these paradoxes, or at least to mollify the rancor they can produce, both the ideas of free trade and of democracy need to become more robust.     

Muffling the swing: STV and the Irish general election of 1981

This article explores alternative hypotheses for variation in the political salience of unemployment. The differences between the political opinions of employed and unemployed people are used as a proxy for the qualitative importance of unemployment. Unemployment is not found to be more politically salient when government support of the unemployed is more generous or when jobless spells are shorter. Far more important is the character of employment. Unemployment is more politically salient in countries where employment guarantees a basic livelihood. The data also suggest that unemployment has greater salience in countries where the unemployed are more likely to use state employment exchanges in searching for work. Two conclusions are suggested. First, public toleration of high unemployment in recent decades may be partly the result of the rise of atypical work arrangements. Second, while it is debatable whether social‐democratic protections of employment standards increase unemployment rates, such efforts may inadvertently increase the political costs of high unemployment.     

Explaining the Decline of Macro-corporatist Political Bargaining Structures in Advanced Capitalist Societies

A growing consensus among many observers of Western European politics has developed in recent years that, in certain countries, national level, consensus-based political bargaining arrangements involving representatives of organized capital, trade unions, and the state are giving way to more sectorally-based, conflictual forms of relations. These developments suggest an overall decline in the efficacy of national-level corporatist institutional structures in the liberal democracies of Western Europe. This article contends that neither of the two general theoretical approaches to the study of corporatism - the liberal model of the "neocorporatist state" (which fails to acknowledge the potential for serious system-threatening instability within corporatism) nor the Marxist model of corporatist "political structures" (which incorrectly predicts labor-generated corporatist instability due to inevitable rank-and-file discontent with the policy outputs of corporatist forms) - can account for this current wave of macro-corporatist instability and decline. In response to this theoretical impasse, this article develops a capitalist-centered explanation for the declining significance of corporatist forms. Business interests, it is maintained, may no longer be viewing corporatist arrangements as beneficial due to certain domestic structural economic changes and to transformations in the global capitalist system.     

It’s the weather, stupid! Individual participation in collective May Day demonstrations

We investigate the possible explanations for variations in aggregate levels of participation in large-scale political demonstrations. A simple public choice inspired model is applied to data derived from the annual May Day demonstrations of the Danish labor movement and socialist parties taking place in Copenhagen in the period 1980–2011. The most important explanatory variables are variations in the weather conditions and consumer confidence, while political and socio-economic conditions exhibit no robust effects. As such accidental or non-political factors may be much more important for collective political action than usually acknowledged and possibly make changes in aggregate levels of political support seem erratic and unpredictable.     

Voting,Collective Action,and Liberalisation in Latin America: The Rise and Fall of the Hillinger Paradox

Chile's economic and political evolution after the 1982–83 financial crisis has been offered as a model for the rest of Latin America. This paper interprets the 1973 military coup, and national recovery during the 1980s and 1990s, in terms of the presence and absence, respectively, of the Hillinger (1971) paradox. The paradox arises when democratic voting on platforms consisting of several issues leads to majority support for a platform, itself consisting of issues, none of which is supported by the majority. In the early 1970s, a particular expression of the Hillinger paradox led Chile to the verge of a bloody civil war, and to a prolonged military dictatorship. In the mid 1980s, an important policy question, that of differentiated industrial protection versus free trade, was solved by a stable compromise in favour of the latter. This avoided the Hillinger paradox and eventually made electoral politics possible again.     

Social Democrats and trade unions in Scandinavia: The decline and persistence of institutional relationships

Abstract.  This article examines the institutional arrangements between Social Democratic parties and trade unions in Denmark, Norway and Sweden. First, the authors show how these relations have weakened at a varying pace. Party–union ties are now quite distant in Denmark, but remain relatively close in Norway and, especially, Sweden. Second, the authors explore this variation using a simple model of political exchange. The finding is that the intensity of the relationship is correlated with the resources that each side can derive from the other, which in turn reflects national differences. Yet it is also clear that the degree of change is related to the formative phase of the institutional arrangement itself: the weaker the ties were from the beginning, the more easily they unravel in response to environmental changes.     

Understanding variation in public support for European integration

Abstract. Much of the research on the European Community focuses on elites and institutions and as a result downplays the importance of the mass public in determining the direction of European integration. A common justification for this viewpoint is that members of the public provide a stable reservoir of strong support for European integration. Recent political events, however, raise doubts about this depiction of a 'passive public'. Consequently, there is a need for a fuller understanding of European attitudes. We specify a number of hypotheses dealing with the effects of international trade interests, security concerns, and demographic characteristics on cross-national and cross-sectional variations in public support for European integration. Using Eurobarometer surveys and OECD data on EC trade from 1973–1989, we investigate these hypotheses in a pooled cross-sectional model. Our statistical results reveal that an individual's level of support is positively related to her nation's security and trade interests in EC membership and her personal potential to benefit from liberalized markets for goods, labour, and money.