Good for some,bad for others: US investors and non-trade issues in preferential trade agreements

Preferential trade agreements (PTAs) trigger investment through their commitment to a liberal market economy. Increasingly however, PTAs go far beyond liberalizing trade and investment flows. Especially controversial features included in most modern PTAs are environmental and labor standards. Do these standards affect business activity? If so, how do investors react to such non-trade issues in trade deals? The literature provides inconclusive findings about the impact of standards on foreign direct investment (FDI). Some contributors argue that strict standards decrease FDI, whilst others claim that environmental and labor protection increases productivity and, in consequence, inward investment. In all likelihood, the usage of aggregated FDI data, as is the case for most studies, causes confusion. I expect standards to influence investors’ decisions – but heterogeneously across sectors. Environmental and labor standards should reduce FDI in polluting and low-skilled labor endowed industries, but increase investment in environmentally clean and high-skilled labor abundant sectors. Based on an original dataset of environmental and social standards in trade agreements and at the sector-level disaggregated US-FDI data, I find robust support for my argument. The paper provides a more nuanced picture on the standards and investment nexus: Standards have no uniform effect on multinationals. Instead, they are good for some, but bad for other industries.     

The Japan-EU Economic Partnership Agreement—economic potentials and policy perspectives

After more than 4 years of negotiations, Japan and the EU have reached an agreement for bilateral free trade. The intended liberalization of trade in goods, agriculture, and services would create the world’s largest free trade area. Japan and Europe are sending a strong signal against protectionism and in favor of free trade and modernizing global trade rules. While free trade in the transatlantic and the transpacific context will remain an illusion for some time to come, the Japan-EU Economic Partnership Agreement (JEEPA) is a realistic option for trade partners at the western and eastern side of the Eurasian continent. The expected overall positive effects of JEEPA should not obscure the limitations and risks of the intended trade integration. There will be economic losers of the agreement both in Europe and in Japan. There is plenty of fuel for political and social conflict. And in light of the many informal barriers, market access to Japan will remain extremely difficult for European companies. Beyond trade policy, JEEPA has a political dimension, too. It shows the political will to counteract economic disintegration and the loss of political substance in the bilateral relationship. The aim is to intensify cooperation, which would benefit both sides economically and politically.     

A novel understanding of experimentation in governance: co-producing innovations between “lab” and “field”

What do experiments do for governance? Along with pragmatist and performative conceptions, we argue that they do not test already existing conditions of governing, but actively transform such conditions. Experiments help to realize specific models of governance by co-producing collective knowledge and material practices. We analyze a series of experiments with “emissions trading” in the USA between 1968 and 2000. The historical perspective shows how different types of experiments worked together: experiments in the laboratory and in the field supported each other in creating epistemic and political authority. This “ping-pong between lab and field” produced subjects and objects, facts and values, knowledge and power and aligned them in a new socio-material configuration, thus realizing emissions trading as a new form of governance.     

Trade-based adoption of voluntary environmental programs in the developing world: Racing to the top or stuck in the mud?

Scholars have consistently found that firms in developing countries adopt voluntary environmental programs (VEPs) in high numbers when their major trade partners are home to many VEP-certified firms. This reflects the following dynamic: Importers based in countries with many VEP-certified facilities demand similarly sustainable production processes from trade partners, and so exporting firms in partner countries adopt VEPs to signal their sustainable practices. Studies have identified characteristics of developing countries that make local exporting firms more likely to adopt VEPs as a signal; however, there has been little analysis as to the country-level characteristics that make importers more (or less) likely to demand VEPs from suppliers abroad, beyond having many VEP-certified firms themselves. This study considers this matter, theorizing that VEP diffusion only accompanies exporting to countries with high levels of income and education, as well as a high number of VEP-certified firms. Panel data analysis provides support for the theory, showing that developing countries only experience trade-based diffusion of ISO 14001 (a widely adopted VEP) through their exports to countries with high income and/or education levels. In contrast, exporting to countries that lack these characteristics creates no such diffusion, even where importing countries’ VEP certification levels are high. Instead, such trade produces a “stuck in the mud” effect, as developing countries’ certification levels stagnate even as those of their import partners rise.     

Between morality and rationality: framing end-of-life care policy through narratives

This paper analyzes the nature of the debate generated prior to the implementation of the Act Respecting End-of-Life Care in 2015 in Québec (Canada). Including medical assistance in dying (MAID) along existing palliative care services, the act is an important policy change on a very sensitive issue. As such, MAID could be categorized as a morality policy issue, the latter being defined as a particular category of policy because of its specific features (issues of first principle, technical simplicity, high salience, public interest, and public participation). In line with Mucciaroni’s proposition, we rather analyze this issue by understanding morality policy as one of two framing strategies (moral and/or rational-instrumental frame). Our research reconstructs four public opinion framings as advanced and transmitted through the media between 2005 and 2015. It shows that although opponents to the bill unsurprisingly framed the debate in deontological terms, mostly referring to sanctity of life as one of the most important values in society, they also framed it on rational-instrumental grounds in a similar proportion, alleging the danger of a slippery slope and potential abuse. As well, if some of the proponents favored a moral framing centered on the argument that dignity and individual autonomy take precedence over all other values, others put forward a rational-instrumental one, where the slippery slope/abuse argument is used as a cautionary statement against the artificial prolongation of life. Our analysis reinforces Mucciaroni’s and Ferraiolo’s assertions that sensitive issues classified as morality policy cannot be apprehended solely through the unidimensional frame of morality.     

Networks and problem recognition: advancing the Multiple Streams Approach

This paper responds to recent calls for more theoretically driven advancements of the Multiple Streams Approach (MSA). It does so by bringing networks theorizing into dialogue with the MSA; highlighting the inclusionary and exclusionary power of networks for determining problem frames and issue recognition. Subsequently, the paper argues that the addition of networks provides a clearer articulation of the role of institutions in steering problem stream processes, which have often been neglected within the MSA at the expense of a focus on agency. The paper puts forward two propositions. The first is that an issue is more likely to be recognised as a problem if it is considered compatible with the ‘appreciative system’ of the network's dominant coalition. The second proposition is that the more organisations a network consists of and the more varied these organisations are, the more likely it is that the dominant coalition alters a condition’s category if there are changes in the problem stream. These propositions are explored through a comparative analysis of recognition of quality of life as a problem in two local level transport sector networks in the UK. Support for these propositions in the findings suggest that the introduction of networks into the MSA can reduce ambiguity and therefore fortuity in relation to problem recognition; second, that the power of the policy entrepreneur can be facilitated or constrained by the institutional context; and third, that comparing multiple issues and their interactions is important for further advancement of the MSA.     

Efficient bilateral taxation of externalities

We consider the quadratic voting mechanism (Lalley and Weyl in Quadratic voting. Working paper, University of Chicago, 2015; Weyl in The robustness of quadratic voting. Working paper, University of Chicago, 2015) and focus on the incentives it provides individuals deciding what proposals or candidates to put up for a vote. The incentive compatibility of quadratic voting rests upon the assumption that individuals value the money used to buy votes, while the budget balance/efficiency of the mechanism requires that the money spent by one voter by redistributed among the other voters. From these assumptions, we show that it follows that strategic proposers will have an incentive to offer proposals with greater uncertainty about individual values. Similarly, we show that, in an electoral setting, quadratic voting provides an incentive to propose candidates with polarized, non-convergent platforms.