'United We Stand, Divided We Fall.' Which Countries Join Coalitions More Often in GATT/WTO Negotiations?
50 Pages Posted: 29 Apr 2015
Date Written: October 8, 2014
Coalition-formation is an important tool to leverage countries' bargaining power in GATT/WTO negotiations. Unlike the "weapons of the weak" reasoning, several econometric models and specifications show that larger economies have a higher probability of joining coalitions. Challenging the view that middle powers have a distinguishable collectivist behavior, even non-linear models show that the relationship between GDP and coalition entry has a linear shape. Large economies join coalitions more often because they are better equipped to absorb transaction costs and also better prepared to deal with the uncertainty of WTO negotiations. Countries more open to trade also join coalitions more often - a less surprising result since the GATT/WTO is a pro-open-trade international institution. Lastly, unlike the "democratic peace" literature, we do not find that democracies cooperate more than dictatorships. When dictatorships become more democratic, they tend to join coalitions up to a threshold; after that, the effect decreases, forming an inverted U-shaped curve, suggesting that the correlation between political regime and cooperation is not straightforward.
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