POLI 354 Lecture Notes - Lecture 7: Trade Diversion, Free Trade, Domino Theory
13 May 2018
School
Department
Course
Professor
POLI%358%Notes% % Arunima%Sharan%
Poli%358%Lecture%7:%Domestic%Politics%and%International%Cooperation:%Institutions%%
1st%February%2018%
%
Legend:%normal%text-%from%slides;%italics:(what(the(professor(said(in(class,(over(and(above(the(slides(
%
Table%of%contents%
- Winning%coalition%and%selectorate%
o %controversial,(powerful(theory,(intuitive(and(rigorous(way(to(show(how(domestic(
institutions(create(incentives(for(leaders(to(cooperate(or(not(cooperate%
o Only(why(leaders(do(or(don’t(implement(policies(is(to(stay(in(power-(so(leader(
cooperates(or(not(based(on(their(perception(of(using(cooperation(to(stay(in(power%
- Trade%cooperation%and%democracy%
%
Recap%
- Putnam’s%model%
o Why(we’re(using(this(is(because(it(allows(us(to(talk(about(the(level(2(of(the(mode-(
how(domestic(politics(influences(leaders(decisions(in(the(international(arena%
- Role%of%interest%groups—why(leaders(sign(PTA%
o Domino%theory-%explain(the(permeation(of(PTAs%
§ Main(logic:(trade(diversion(that(happens(after(one(set(of(countries(join(a(PTA(
encourages(other(countries(to(join%
§ Creates(a(pressure(to(be(included(to(level(the(playing(field(with(them(to(
maintain(the(share(in(the(market(%
§ If(the(countries(in(a(PTA(are(not(a(relevant(market,(then(the(excluded(
countries(will(not(care(much%
§ Import(competing(industries(will(want(to(stop(trade(liberalization(while(
exporters(are(okay(with(it,(but(as(soon(as(they(start(facing(trade(diversion,(
they(have(incentives(to(mobilize(and(push(for(trade(liberalization%
§ Focus(on(Baccini’s(article(more(–(simpler(than(Baldwin’s((%
o From%the%S-H%to%the%RTAA%
§ Reciprocity(buys(the(support(of(exporters-(makes(them(more(interested(in(
future(trade(policy-(new(markets(open(up((
§ Trade(policy(starts(to(be(biased(to(exporters-(due(to(reciprocity(
%
Society%centered%approach%
- Why%some%governments%cooperate%more%than%others?%
- Answer:%because%governments%differ%from%one%another%
- How?%Interest%groups%and%institution%
- Why(some(countries(cooperate(more(than(others-(they’re(different(because(they(have(
different(powerful(interest(groups(with(different(preferences%
- Some(are(more(naturally(open-(smaller(markets-(Canada(has(to(be(more(open(than(the(US(%
- Countries(have(different(institutions-(domestic(formal(institutions(help(us(understand(why(
some(countries(cooperate(and(some(don’t(%
- See%how%selectorate%theory%explains%this%%
%
Definitions%
- The%selectorate%is%the%group%of%people%who%have%a%say%in%selecting/electing%the%leader%
o Democracy-(full(electorate(%
POLI%358%Notes% % Arunima%Sharan%
- The%winning%coalition%is%the%subset%of%selectorate%members%whose%support%the%leader%
needs%to%stay%in%office%
o Democracy-(leading(party(or(the(coalition(of(parties-(50%+1(of(the(population(%
- Those%who%are%not%part%of%the%selectorate%and%disenfranchised%
%
Three%types%of%political%systems%
%
- Large(majority(of(the(population(in(a(democracy(can(vote-(SW%
- Sw-(autocratic(regimes(that(allow(elections,(but(they(are(not(free(and(not(regular-(like(
Russia%
- Monarchies(in(the(middle(east-(small(selectorate(and(small(coalition,(winning(coalition-(is(a(
very(small(circle(–(army,(key(interest(groups(etc.(leader(doesn’t(need(majority(of(the(votes%
%
Two%mechanisms%
- How%should%a%leader%stay%in%power?%
- How%easy%is%it%to%replace%a%leader?%If(the(selectorate(and(winning(coalition(are(small(or(
large%
%
Staying%in%power%
- Leaders%have%2%tools%they%can%use%to%please%their%supporters%and%remain%in%power%
o Private%goods%are%possessed%by%and%benefit%only%one%individual.%For%example:%land%
or%bribes,%or%privileges%like%monopoly%rights%
o Public%goods%benefit%everyone%in%society.%For%instance,%good%public%policy,%along%
with%things%like%roads%and%bridges%
- Size(of(the(electorate(creates(incentives(to(use(one(or(the(other%
%
w%and%private%good%
- When%a%leader%has%a%small%wining%coalition%(w),%he%has%incentives%to%use%private%goods%to%
please%these%supporters-%public(goods(are(too(expensive(%
- Public%goods%would%benefit%more%people%than%necessary.%Spending%the%same%amount%of%
resources-%or%fewer-%on%private%goods%will%satisfy%the%w%members,%leaving%more%resources%
for%the%leader’s%personal%use%%
%
W%and%the%public%good%
- When%a%leader%has%a%large%winning%coalition%(W),%they%have%incentives%to%use%public%goods%
to%please%these%supporters%
- To%provide%each%of%the%many%members%of%W%with%enough%private%goods%to%ensure%their%
loyalty%would%be%very%expensive.%%
o Public(goods(like(hospitals,(schools(etc.(are(easier(and(cheaper(to(disperse%
- W%system%leaders%of%use%some%semi-private%goods%like%contracts,%but%most%benefits%from%
targeted%public%goods%like%road%building%and%government%programs%
%
