Leadership Survival, Regime Type, Policy Uncertainty and PTA Accession

Abstract

Preferential trade agreements (PTAs) limit member-states' trade policy discretion; consequently policy uncertainty is mitigated. Reductions in policy uncertainty stemming from accession to a PTA improve the resource allocation decisions of the voters and reduce deadweight losses from the need to self-insure against policy uncertainty. The resultant increase in efficiency improves an incumbent government's -- particularly a democratic government's -- chance of surviving in office. We test this prediction using survival analysis, adjusting for potential selection biases using propensity score matching. We find robust support for the proposition that governments that sign PTAs survive longer in office than observationally similar governments that do not sign. And we find that this effect is stronger in democracies than in autocracies.

Keywords: Trade Agreements, Leader Survival, International Political Economy