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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
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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 

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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

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