Depth, Flexibility and International Cooperation: The Politics of Trade Agreement Design

50 Pages Posted: 26 Aug 2013

See all articles by Leonardo Baccini

Leonardo Baccini

McGill University

Andreas Dür

University of Salzburg - Department of Political Science and Sociology

Manfred Elsig

University of Bern

Date Written: July 24, 2013

Abstract

States design some international institutions more flexibly than others. What explains this variation? Focusing on preferential trade agreements, we argue that different aspects of institutional design are interdependent. In particular, we posit that deep agreements create an incentive for states to add more flexibility, which can take the form of transitional flexibility or provisions that serve as safety valves in the long term. Both types of flexibility mechanisms increase with depth and are complementary. We also argue that states are concerned about the stability of an agreement and as a consequence introduce ex-ante constraints against exploiting the future application of flexibility. An original data-set on the design of 587 trade agreements signed between 1945 and 2009 allows us to test our arguments. Descriptive evidence, multivariate statistics and instrumental variable models all support the theoretical expectations. The paper contributes to the literature on the design of international institutions and preferential trade agreements.

Keywords: international institutions, preferential trade agreements, institutional design, depth, flexibility

JEL Classification: F1, F5

Suggested Citation

Baccini, Leonardo and Dür, Andreas and Elsig, Manfred, Depth, Flexibility and International Cooperation: The Politics of Trade Agreement Design (July 24, 2013). Available at SSRN: https://ssrn.com/abstract=2315838 or http://dx.doi.org/10.2139/ssrn.2315838

Leonardo Baccini (Contact Author)

McGill University ( email )

1001 Sherbrooke St. W
Montreal, Quebec H3A 1G5
Canada

Andreas Dür

University of Salzburg - Department of Political Science and Sociology ( email )

Akademiestraße 26
Salzburg, Salzburg 5020
Austria

Manfred Elsig

University of Bern ( email )

Gesellschaftsstrasse 49
Bern, BERN 3001
Switzerland

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