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The limitations of “structural” theories of commercial policy

Published online by Cambridge University Press:  22 May 2009

Timothy J. McKeown
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If a “structural” theory is one that purports to explain behavior in terms of environmental conditions and that largely eschews analysis of the internal processes of decision makers, then it is difficult to identify a theory of commercial policy which is not “structural.” Most microeconomic theory is structural; so are most balance-of-power theories. In the realm of theories of commercial policy, hegemonic stability theories as well as some recently developed theories of international tariff levels fit this description. In the latter category Judith Goldstein's work, which attempts to account for American commercial policy in terms of the ideology of American central decision makers, and Charles Kindleberger's ambitious sketch of a general theory of 19th-century tariff changes in terms of the diffusion of liberal ideology constitute lonely examples of nonstructural research strategies.

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International Organization , Volume 40 , Issue 1 , Winter 1986 , pp. 43 - 64
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Copyright © The IO Foundation 1986

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References

1. The term “structural” is itself perhaps not the most felicitous one to use, since it is employed so frequently and with a wide variety of meanings. However, there exists no better substitute. The leading rival, “microeconomic,” also is not quite satisfactory because it excludes formulations such as balance-of-power theories, which are not part of microeconomics per se. It is also misleading because some research programs within microeconomics do not adopt the orthodox assumptions. See, for example, Katona, George, Psychological Economics (New York: Elsevier, 1977)Google Scholar; Alhadeff, David A., Microeconomics and Human Behavior: Toward a New Synthesis of Economics and Psychology (Berkeley: University of California Press, 1980).Google Scholar

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23. Moreover, for simple navigational problems, a geocentric model of the cosmos is used even today, because it is accurate enough for the purpose at hand, and because it is a much simpler theory than the Copernican theory. See Kuhn, Thomas S., The Copernican Revolution (Cambridge: Harvard University Press, 1957), p. 38Google Scholar. Thus, if our purpose were limited to this application, we would have no reason to abandon the geocentric model. Only if the domain of prediction were enlarged or the requirements for accuracy strengthened would we have any reason to question the geocentric system or to develop a more accurate account of the processes generating outcomes of interest.

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43. Ibid., p. 389.

44. Johnson, Harry G., “Optimum Tariffs and Retaliation,” Review of Economics Studies 21 (1954)Google Scholar; Ibid., p. 153; Schelling, Thomas C., “Hockey Helmets, Concealed Weapons, and Daylight Saving: A Study of Binary Choice with Externalities,” Journal of Conflict Resolution 17 (09 1973), pp. 381–428CrossRefGoogle Scholar. This latter conclusion points to the danger of attempting to generalize from the two-country to the n-country world, as Scitovsky attempted to do in his sketch. The defection of a few countries from free trade might not be a sufficient condition for the defection of all countries.

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49. McKeown, Timothy J., “Hegemonic Stability Theory and 19th-Century Tariff Levels in Europe,” International Organization 37 (Summer 1983), pp. 73–91CrossRefGoogle Scholar; Conybeare, John, “Public Goods, Prisoner's Dilemmas and the International Political Economy,” International Studies Quarterly 28 (Spring 1984), pp. 5–22CrossRefGoogle Scholar; Keohane, Robert O., After Hegemony (Boston: Little, Brown, 1984), pp. 31–46.Google Scholar

50. While Gilpin has presented an embryonic theory of hegemonic rise and decline, the argument contains no feedback loop running from the opening of the trading system to the strength of the hegemonic state—except perhaps the implicit argument that the leader's technological advantage diffuses more rapidly in an open system than in a less open one. However, if diffusion of technology proceeds via such mechanisms as direct foreign investment and university training of foreigners, then the nature of the trade regime may not be very important. Nor does Gilpin's argument attempt to relate the appearance of new hegemons to a certain set of international “structural” conditions.

51. A related difficulty in modeling global tariff changes is that showing that some nations will gain from free trade is not sufficient to “explain” tariff reductions; conversely, showing that some nations will lose from free trade does not explain tariff increases. Since world imports equal world exports, if some country is experiencing increased exports (hence, a greater interest in lowering trade barriers), some other country or countries must be experiencing increases in imports (hence, more resistance to liberalization is likely in these countries). Unless the gaining country has more political influence than the losing country, one has no basis for predicting changes in overall tariff levels simply as a result of shifts in export surpluses.

52. Conybeare, John, “A Comparative Study of Selected Trade Wars: Anglo-Hanse, Late 19th Century European, Hawley Smoot, Chickens and Steel” (Paper presented at the Annual Meeting of the American Political Science Association,Washington, D.C.,September 1984)Google Scholar; Keohane, , After Hegemony, pp. 135–81Google Scholar; Katzenstein, Peter J., Corporatism and Change: Austria, Switzerland, and the Politics of Industry (Ithaca: Cornell University Press, 1984).Google Scholar

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55. McKeown, Timothy J., “Firms and Tariff Regime Change: Explaining the Demand for Protection,” World Politics 36 (1984)CrossRefGoogle Scholar. Another intriguing alternative to unitary utility-maximization treatments not discussed in this article is provided by the rapidly expanding area of artificial intelligence models of the foreign-policy decision-making process. For an introduction to this literature, see Sylvan, Donald A. and Steve, Chan, eds., Foreign Policy Decision Making: Perception, Cognition, and Artificial Intelligence (New York: Praeger, 1984).Google Scholar