Hostname: page-component-78c5997874-s2hrs Total loading time: 0 Render date: 2024-11-02T20:52:52.407Z Has data issue: false hasContentIssue false
  • English
  • Français

Hubs of Governance: Path Dependence and Higher-Order Effects of Preferential Trade Agreement Formation*

Published online by Cambridge University Press:  28 January 2016

Soo Yeon Kim  and
Mark S. Manger
Get access Rights & Permissions [Opens in a new window]

Abstract

In this paper, we investigate the causes and consequences of institutional design choices in the liberalization of services trade and investment in preferential trade agreements (PTAs). We distinguish between a positive-list and a negative-list approach to services liberalization, and analyze PTAs signed by countries of the Asia-Pacific. We develop an information-based argument that explains why these different types induce path dependence in subsequent choices, and derive hypotheses that capture the “history” effect of choosing either institutional model. In doing so, we examine whether particular “modes of governance” diffuse through the growing network of trade agreements through the adoption of rules by third parties in their own PTAs. The empirical analysis tests these hypotheses using simulation-based dynamic network analysis methods. We find evidence of strong path dependence in the choice of liberalization approach, affecting the evolution of PTA networks in the Asia-Pacific and the diffusion of services liberalization in general. Such path dependence has long-term consequences for the institutional features of the international trade regime.

Type
Original Articles
Information
Political Science Research and Methods , Volume 5 , Issue 3 , July 2017 , pp. 467 - 488
Copyright
© The European Political Science Association 2016 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Footnotes

*

Soo Yeon Kim, Associate Professor, Department of Political Science, National University of Singapore, 10 Ridge Crescent, Singapore 119260 ([email protected]). Mark S. Manger, Associate Professor, Munk School of Global Affairs, University of Toronto, 315 Bloor Street W., Toronto, ON M5S 0A7, Canada ([email protected]). The authors would like to thank Despina Alexiadou, Marcelo Olarreaga, Martin Gassebner, Dirk de Bièvre, Andreas Dür, Jonas Tallberg, Gabriele Spilker, Tobias Böhmelt, Erik van der Marel, and participants at the 2012 EPSA and 2013 PEIO conferences and ECPR Joint Sessions for comments and suggestions. Special thanks go to Tom Snijders for advice on aspects of the estimation and to Yoram Haftel for sharing data on investment treaty ratifications. All remaining errors remain the authors’ own. To view supplementary material for this article, please visit http://dx.doi.org/10.1017/psrm.2016.2

References

Aggarwal, Vinod K., and Urata, Shujiro. 2006. Bilateral Trade Arrangements in the Asia-Pacific: Origins, Evolution, and Implications. London: Routledge.Google Scholar
Aghion, Philippe, Antràs, Pol, and Helpman, Elhanan. 2007. ‘Negotiating Free Trade’. Journal of International Economics 73(1):1–30.Google Scholar
Baccini, Leonardo, and Dür, Andreas. 2012. ‘The New Regionalism and Policy Interdependence’. British Journal of Political Science 42(1):57–79.Google Scholar
Bagwell, Kyle, and Robert W. Staiger. 1999. ‘Regionalism and Multilateral Tariff Cooperation’. In John Piggott and Alan Woodland (eds), International trade policy and the Pacific Rim: Proceedings of the IEA Conference held in Sydney, Australia, 157–185. London: Macmillan.Google Scholar
Baier, Scott L., Bergstrand, Jeffrey H., and Mariutto, Ronald. 2011. ‘Economic Determinants of Free Trade Agreements, Revisited: Distinguishing Sources of Interdependence’. Working Paper, Department of Finance, Mendoza College of Business and Kellogg Institute for International Studies, Notre Dame, IN.Google Scholar
Baldwin, Richard, Haaparanta, Pertti, and Kiander, Jaakko. 1995. Expanding Membership of the European Union. Cambridge: Cambridge University Press.Google Scholar
Bhagwati, Jagdish. 1991. The World Trading System at Risk. Princeton, NJ: Princeton University Press.Google Scholar
Bhagwati, Jagdish. 1993. ‘Regionalism and Multilateralism: An Overview’. In Jaime de Melo and A. Panagariya (eds), New Dimensions in Regional Integration, 22–51. Cambridge: Cambridge University Press.Google Scholar
Borchert, Ingo, Gootiiz, Batshur, and Mattoo, Aaditya. 2011. ‘Services in Doha: What’s on the Table?’. In Will Martin and Aaditya Mattoo (eds), Unfinished Business: The WTO’s Doha Agenda, 115–143. Washington, DC: The World Bank.Google Scholar
Borchert, Ingo, Gootiiz, Batshur, and Mattoo, Aaditya. 2012a. ‘Guide to the Services Trade Restrictions Database’. World Bank Policy Research Working Paper (WPS6108), The World Bank, Washington, DC.Google Scholar
Borchert, Ingo, Gootiiz, Batshur, and Mattoo, Aaditya. 2012b. ‘Policy Barriers to International Trade in Services: New Empirical Evidence’. World Bank Policy Research Working Paper (WPS6109), The World Bank, Washington, DC.Google Scholar
Cameron, Maxwell A., and Tomlin, Brian W.. 2000. The Making of NAFTA: How the Deal was Done. Ithaca, NY: Cornell University Press.Google Scholar
Cao, Xun. 2009. ‘Networks of Intergovernmental Organizations and Convergence in Domestic Economic Policies’. International Studies Quarterly 53(4):1095–1130.Google Scholar
Cao, Xun. 2012. ‘Global Networks and Domestic Policy Convergence: A Network Explanation of Policy Changes’. World Politics 64(3):375–425.Google Scholar
Capling, Ann. 2008. ‘Preferential Trade Agreements as Instruments of Foreign Policy: An Australia–Japan Free Trade Agreement and its Implications for the Asia Pacific Region’. The Pacific Review 21(1):27–43.Google Scholar
Chase, Kerry A. 2008. ‘Moving Hollywood Abroad: Divided Labor Markets and the New Politics of Trade in Services’. International Organization 62(4):653–687.Google Scholar
Cranmer, Skyler J., Desmarais, Bruce A., and Kirkland, Justin H.. 2012. ‘Towards a Network Theory of Alliance Formation’. International Interactions 38(3):295–324.Google Scholar
Dent, Christopher M. 2006. New Free Trade Agreements in the Asia-Pacific. Basingstoke: Palgrave Macmillan.Google Scholar
Dobbin, Frank, Simmons, Beth, and Garrett, Geoffrey. 2007. ‘The Global Diffusion of Public Policies: Social Construction, Coercion, Competition, or Learning?’ Annual Review of Sociology 33(1):449–472.Google Scholar
Drake, William J., and Nicolaïdis, Kalypso. 1992. ‘Ideas, Interests, and Institutionalization – Trade in Services and the Uruguay Round’. International Organization 46(1):37–100.CrossRefGoogle Scholar
Egger, Peter, and Larch, Mario. 2008. ‘Interdependent Preferential Trade Agreement Memberships: An Empirical Analysis’. Journal of International Economics 76(2):384–399.Google Scholar
Elkins, Zachary, and Simmons, Beth A.. 2005. ‘On Waves, Clusters, and Diffusion: A Conceptual Framework’. Annals of the American Academy of Political and Social Science 598:33–51.Google Scholar
Fink, Carsten, and Molinuevo, Mart N.. 2008. ‘East Asian Preferential Trade Agreements in Services: Liberalization Content and WTO Rules’. World Trade Review 7(4):641–673.Google Scholar
Fink, Carsten, and Molinuevo, Martín. 2007. “East Asian Free Trade Agreements in Services: Roaring Tigers or Timid Pandas?” Trade Issues in East Asia: Liberalization of Trade in Services. Washington, DC: The World Bank.Google Scholar
Fiorentino, Roberto V., Verdeja, Luis, and Toqueboeuf, Christelle. 2007. The Changing Landscape of Regional Trade Agreements: 2006 Update. Geneva: WTO Secretariat, Regional Trade Agreements Section, Trade Policies Review Division.Google Scholar
Franzese, Robert J., Hays, Jude C., and Kachi, Aya. 2012. ‘Modeling History Dependence in Network-Behavior Coevolution’. Political Analysis 20(2):175–190.Google Scholar
Gawande, Kishore, and Bandyopadhyay, Usree. 2000. ‘Is Protection for Sale? Evidence on the Grossman-Helpman Theory of Endogenous Protection’. Review of Economics and Statistics 82(1):139–152.Google Scholar
Gilardi, Fabrizio. 2010. ‘Who Learns from What in Policy Diffusion Processes?’. American Journal of Political Science 54(3):650–666.Google Scholar
Gray, Julia. 2014. ‘Domestic Capacity and the Implementation Gap in Regional Trade Agreements’. Comparative Political Studies 47(1):55–84.Google Scholar
Grossman, Gene M., and Helpman, Elhanan. 1995. ‘The Politics of Free-Trade Agreements’. American Economic Review 85(4):667–690.Google Scholar
Hafner-Burton, Emily, and Montgomery, Alexander H.. 2006. ‘Power Positions’. Journal of Conflict Resolution 50(1):3–27.Google Scholar
Hafner-Burton, Emily, Kahler, Miles, and Montgomery, Alexander H.. 2009. ‘Network Analysis for International Relations’. International Organization 63:559–592.Google Scholar
Haftel, Yoram Z., and Thompson, Alexander. 2013. ‘Delayed Ratification: The Domestic Fate of Bilateral Investment Treaties’. International Organization 67(2):355–387.Google Scholar
Hoekman, Bernard. 1995. ‘Assessing the General Agreement on Trade in Services’. In Will Martin and L. Alan Winters (eds), The Uruguay Round and the Developing Countries, 88–124. Cambridge: Cambridge University Press.Google Scholar
Hoekman, Bernard, and Mattoo, Aaditya. 2000. ‘Services, Economic Development and the Next Round of Negotiations on Services’. Journal of International Development 12(2):283–296.Google Scholar
Hoekman, Bernard, and Kostecki, Michel M.. 2010. The Political Economy of the World Trading System, 3rd ed. New York: Oxford University Press.Google Scholar
Hoff, Peter D., and Ward, Michael D.. 2004. ‘Modeling Dependencies in International Relations Networks’. Political Analysis 12(2):160–175.Google Scholar
Indlekofer, Natalie, and Brandes, Ulrik. 2013. ‘Relative Importance of Effects in Stochastic Actor-Oriented Models’. Network Science 1(3):278–304.CrossRefGoogle Scholar
Jönsson, Christer, and Tallberg, Jonas. 2008. ‘Institutional Theory in International Relations’. In Jon Pierre and B. Guy Peters (eds), Debating Institutionalism, 86–114. Manchester: Manchester University Press.Google Scholar
Katada, Saori N., and Solís, Mireya. 2008. Cross Regional Trade Agreements: Understanding Permeated Regionalism in East Asia, illustrated ed. Berlin: Springer.Google Scholar
Katada, Saori N., Solís, Mireya, and Stallings, Barbara. 2009. Competitive Regionalism: Explaining the Diffusion of FTAs in the Pacific Rim. London: Palgrave.Google Scholar
Koremenos, Barbara, Lipson, Charles, and Snidal, Duncan. 2001. ‘The Rational Design of International Institutions’. International Organization 55(4):761–799.Google Scholar
Levy, Philip I. 1997. ‘A Political-Economic Analysis of Free-Trade Agreements’. The American Economic Review 87(4):506–519.Google Scholar
Limão, Nuno. 2006. ‘Preferential Trade Agreements as Stumbling Blocks for Multilateral Trade Liberalization: Evidence for the United States’. The American Economic Review 96(3):896–914.Google Scholar
Limão, Nuno. 2007. ‘Are Preferential Trade Agreements with Non-Trade Objectives a Stumbling Block for Multilateral Liberalization?’ Review of Economic Studies 74(3):821–855.Google Scholar
Mansfield, Edward D., Milner, Helen V., and Rosendorff, B. Peter. 2002. ‘Why Democracies Cooperate More: Electoral Control and International Trade Agreements’. International Organization 56(3):477–513.Google Scholar
Maoz, Zeev. 2006. ‘Network Polarization, Network Interdependence, and International Conflict, 1816-2002’. Journal of Peace Research 43(4):391–411.Google Scholar
Maoz, Zeev, Kuperman, Ranan D., Terris, Lesley, and Talmud, Ilan. 2006. ‘Structural Equivalence and International Conflict: A Social Networks Analysis’. Journal of Conflict Resolution 50(5):664–689.Google Scholar
Marchetti, Juan A., and Roy, Martin. 2008. ‘Services Liberalization in the WTO and in PTAs’. In Juan A. Marchetti and Martin Roy (eds), Opening Markets for Trade in Services: Countries and Sectors in Bilateral and WTO Negotiations, 61–112. Cambridge: Cambridge University Press.Google Scholar
Mattoo, Aaditya, and Low, Patrick. 2000. ‘Is There a Better Way? Alternative Approaches to Liberalisation Under the GATS’. In Pierre Sauvé and Robert Stern (eds), GATS 2000: New Directions in Services Trade Liberalization, 449–472. Washington, DC: Brookings Institution.Google Scholar
Mattoo, Aaditya, and Sauvé, Pierre. 2011. ‘Services’. In Jean-Pierre Chauffour and Jean-Christophe Maur (eds), Preferential Trade Agreement Policies for Development: A Handbook, 235–274. Washington, DC: World Bank.Google Scholar
Milner, Helen V. 1988. Resisting Protectionism: Global Industries and the Politics of International Trade. Princeton, NJ: Princeton University Press.Google Scholar
Nelson, Douglas. 1988. ‘Endogenous Tariff Theory: A Critical Survey’. American Journal of Political Science 88(3):796–838.Google Scholar
O’Neil, Peter. 2011. ‘EU Nations Reluctant to Liberalize Trade in Services; Canada’s “Negative-List” Proposal Opposed’. Montreal Gazette, 26 January, B7.Google Scholar
Page, Scott E. 2006. ‘Path Dependence’. Quarterly Journal of Political Science 1(1):87–115.Google Scholar
Panagariya, Arvind. 1999. ‘The Regionalism Debate: An Overview’. World Economy 22(4):477–511.Google Scholar
Panagariya, Arvind. 2000. ‘Preferential Trade Liberalization: The Traditional Theory and New Developments’. Journal of Economic Literature 38(2):287–331.Google Scholar
Poast, Paul. 2010. ‘(Mis)Using Dyadic Data to Analyze Multilateral Events’. Political Analysis 18(4):403–425.Google Scholar
Pomfret, Richard W. T. 1988. Unequal Trade: The Economics of Discriminatory International Trade Policies. Oxford: Basil Blackwell.Google Scholar
Ravenhill, John. 2009. ‘East Asian Regionalism: Much Ado about Nothing?’. Review of International Studies 35(1):215–235.CrossRefGoogle Scholar
Ravenhill, John. 2010. ‘The “New East Asian Regionalism”: A Political Domino Effect’. Review of International Political Economy 17(2):178–208.Google Scholar
Ripley, Ruth M., Snijders, Tom A. B., and Lopez, Paulina Preciado. 2011. Manual for RSiena. Oxford: Department of Statistics, University of Oxford.Google Scholar
Roy, Martin, Marchetti, Juan, and Lim, Hoe. 2007. ‘Services Liberalization in the New Generation of Preferential Trade Agreements (PTAs): How Much Further than the GATS?’ World Trade Review 6(2):155–192.Google Scholar
Sauvé, Pierre. 2000. ‘Developing Countries and the GATS 2000 Round’. Journal Of World Trade 34(2):85–92.Google Scholar
Simmons, Beth A., and Elkins, Zachary. 2004. ‘The Globalization of Liberalization: Policy Diffusion in the International Political Economy’. American Political Science Review 98(1):171–189.Google Scholar
Snijders, Tom A. B. 2001. ‘The Statistical Evaluation of Social Network Dynamics’. Sociological Methodology 31(1):361–395.Google Scholar
United Nations Conference on Trade and Development (UNCTAD). 2004. ‘World Investment Report: The Shift Towards Services’. UNCTAD World Investment Report, UNCTAD, Geneva.Google Scholar
Viner, Jacob. 1950. The Customs Union Issue. New York: Carnegie Endowment for International Peace.Google Scholar
World Trade Organization (WTO). 2010. Measuring Trade in Services: A Training Module for the World Bank. Geneva: WTO.Google Scholar
World Trade Organization (WTO). 2011. World Trade Report 2011: The WTO and Preferential Trade Agreements: From Co-Existence to Coherence. Geneva: WTO.Google Scholar
Supplementary material: PDF

Kim and Manger supplementary material

Kim and Manger supplementary material 1

Download Kim and Manger supplementary material(PDF)
PDF 170.9 KB
Supplementary material: PDF

Kim and Manger supplementary material

Kim and Manger supplementary material 2

Download Kim and Manger supplementary material(PDF)
PDF 166.9 KB
Supplementary material: PDF

Kim and Manger supplementary material 3

Kim and Manger supplementary material 3

Download Kim and Manger supplementary material 3(PDF)
PDF 468.2 KB