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Preventing protectionism: international institutions and trade policy

Baccini, Leonardo and Kim, Soo Yeon (2012) Preventing protectionism: international institutions and trade policy. The Review of International Organizations, 7 (4). pp. 369-398. ISSN 1559-7431

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Abstract

This paper examines the role of international institutions in preventing the rise of protectionism. We analyze states’ choices in trade policy during the current global economic crisis, a situation likely to exacerbate uncertainty in the conduct of commercial relations and to push countries toward “beggar-thy-neighbor” trade policies. The main argument of the paper is that the numerous international institutions present in the international system during the current economic crisis serve as conveyors of information and mechanisms of commitment and socialization. They mitigate the uncertainty problem that prevails in prisoner’s dilemma settings such as trade. Economic international organizations increase the flow of information about the preferences and behaviors of its members. Non-economic organizations also have a role to play as social environments that encourage cooperation. Specialized international institutions devoted to trade, such as the WTO and preferential trade agreements (PTAs), not only provide monitoring and enforcement functions but also lock in commitments to liberal trade through legal obligations that make defections costly. We test our argument using a dataset of trade policies during the current economic crisis and of membership in international organizations. The paper finds strong support for the role of international institutions as commitment and socialization mechanisms in preventing the rise of protectionism.

Item Type: Article
Official URL: http://www.springer.com/social+sciences/journal/11...
Additional Information: © 2012 Springer Science+Business Media LLC
Library of Congress subject classification: H Social Sciences > HC Economic History and Conditions
J Political Science > JZ International relations
Journal of Economic Literature Classification System: F - International Economics > F1 - Trade > F13 - Commercial Policy; Protection; Promotion; Trade Negotiations; International Trade Organizations
F - International Economics > F5 - International Relations and International Political Economy > F53 - International Agreements and Observance; International Organizations
Sets: Departments > International Relations
Collections > Economists Online
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Date Deposited: 24 Aug 2012 13:53
URL: http://eprints.lse.ac.uk/45573/

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