Working Paper: CEPR ID: DP747
Authors: Michael P. Leidy; Bernard Hoekman
Abstract: It is commonly observed that international trade negotiations repeatedly fail to achieve outcomes that would appear to satisfy the criteria of efficiency and mutual advantage. It can be argued that this is due principally to the influence of interest groups. This paper develops an analytical structure for assessing the process of international trade negotiations that includes interest groups and self-interested negotiators as fundamental elements. The central conclusion of the analysis is that it is likely to be very difficult for a government that wishes to promote national welfare to do so. The political economy analysis suggests there are strong incentives facing politicians to produce agreements whose profile appears distinctly liberalizing while significant protectionist character flaws tend to be buried in the esoterica. The primary need is to design institutions that will help to introduce much greater transparency in both regional and multilateral agreements and thereby encourage the mobilization of diffuse consumer interests. Only then will significant progress towards liberalization - whether regional or multilateral - become more likely.
Keywords: Public Choice; Regional Trade Agreements; Multilateral Negotiations
JEL Codes: F13
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| interest groups (D72) | negotiators (C78) |
| negotiators (C78) | trade policy (F13) |