How Electoral Institutions Change the Influence of World Trade Integration on Trade Policies

72nd Midwest Political Science Association Annual Conference 2014 in Chicago, April 03-06

25 Pages Posted: 27 Mar 2014

See all articles by Christian W. Martin

Christian W. Martin

University of Kiel - Faculty of Economics and Social Sciences; New York University (NYU)

Nils D. Steiner

Johannes Gutenberg-University of Mainz; Johannes Gutenberg University Mainz - Department of Political Science

Date Written: March 27, 2014

Abstract

World integration levels influence opportunity costs of maintaining restrictive national trade policies. In an integrated world, restrictive trade policies are more costly than in a context of low overall levels of world market integration. We argue that policy makers can be expected to react to these varying incentives to liberalize the trade regimes of their countries, yet do so not in a uniform fashion across countries. Rather, the responsiveness to changes in levels of world trade integration is conditional upon the electoral system the country in question employs. This is due to the fact that opportunity cost considerations increase in importance with a) the degree to which policy makers are isolated from the influence of protectionist interest groups; and b) the credibility with which losers of integration can be promised compensation. Both aspects weigh more strongly in countries that employ proportional representation as opposed to majority voting. We test this hypothesis using a model of conditional trade policy diffusion where world levels of integration are treated as diffusion influence that is interacted with a measure of the proportionality of a country’s electoral system. Empirical results support the hypothesis. Moreover, it is shown that it is district magnitude as a measure of proportionality rather than the higher number of parties associated with more proportional voting rules that drives the results.

Suggested Citation

Martin, Christian W. and Martin, Christian W. and Steiner, Nils D. and Steiner, Nils D., How Electoral Institutions Change the Influence of World Trade Integration on Trade Policies (March 27, 2014). 72nd Midwest Political Science Association Annual Conference 2014 in Chicago, April 03-06, Available at SSRN: https://ssrn.com/abstract=2416702 or http://dx.doi.org/10.2139/ssrn.2416702

Christian W. Martin (Contact Author)

University of Kiel - Faculty of Economics and Social Sciences ( email )

Westring 400
Kiel, 24118
Germany

New York University (NYU) ( email )

Bobst Library, E-resource Acquisitions
20 Cooper Square 3rd Floor
New York, NY 10003-711
United States

Nils D. Steiner

Johannes Gutenberg-University of Mainz ( email )

Johannes Gutenberg University Mainz - Department of Political Science ( email )

Saarstrasse 21
Mainz, D-55099
Germany

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